Biofuel Production Jobs Tax Credit

Companies that invest in the development of a biofuel production facility may be eligible for a tax credit of 3% of the previous year’s annual employee wages. Companies may claim this credit against the utility gross receipts and utility service use taxes for up to 10 years; the credit may be refundable during the incentive period or claimed as a credit against utility taxes paid with a carryforward for earned but unused amounts. Companies may also be eligible for a tax credit of 1.5% of qualified capital investment annually for up to 10 years. Companies may claim this credit against the income tax, estimated income taxes, financial institution excise tax, or the insurance premium tax. The credit may also be claimed as a credit against taxes paid with a carryforward for earned but unused amounts.

For the purposes of the credit, biofuel is defined as a motor vehicle fuel that is produced from grain, starch, oilseeds, vegetable, algae, animal materials, or other biomass. To be eligible for the tax credits, companies must execute a project agreement with the Governor.

(Reference Code of Alabama 2-2-90 and 40-18-370 through 40-18-383)