Small Agri-Biodiesel Producer Tax Credit

NOTE: This incentive originally expired on December 31, 2017, but was retroactively extended through December 31, 2020, by Public Law 116-94.

A small agri-biodiesel producer that is registered with the Internal Revenue Service (IRS) may be eligible for a tax incentive in the amount of $0.10 per gallon of agri-biodiesel that is: sold and used by the purchaser in the purchaser's trade or business to produce an agri-biodiesel and diesel fuel mixture; sold and used by the purchaser as a fuel in a trade or business; sold at retail for use as a motor vehicle fuel; used by the producer in a trade or business to produce an agri-biodiesel and diesel fuel mixture; or used by the producer as a fuel in a trade or business. A small producer is one that has, at all times during the tax year, not more than 60 million gallons of productive capacity of any type of agri-biodiesel. Agri-biodiesel is defined as diesel fuel derived solely from virgin oils, including esters derived from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds, and camelina, and from animal fats; renewable diesel does not qualify for the credit. The incentive applies only to the first 15 million gallons of agri-biodiesel produced in a tax year is allowed as a credit against the producer's income tax liability.. For more information, see IRS Publication 510 and IRS Forms 637 and 8864, which are available via the IRS website. (Reference Public Law 116-94, Public Law 111-312, Section 701; and 26 U.S. Code 40A)

Point of Contact
Excise Tax Branch
U.S. Internal Revenue Service Office of Chief Counsel
Phone: (202) 317-6855
http://www.irs.gov/