Biofuels Tax Exemption

Through December 31, 2028, a sales and use tax of 6.25% applies to 90% of the proceeds from the sale of fuel blends containing 15% ethanol (E15) and to 80% of the proceeds from the sale of fuel blends containing between 20% and 50% ethanol. This tax does not apply to the proceeds from the sale of fuel blends containing between 51% and 83% ethanol (E85). If at any time the sales and use tax is 1.25%, the tax on ethanol fuel blends below 51% ethanol will apply to 100% of the proceeds of sales made after December 31, 2028. Taxes will apply to 100% of the proceeds from the sale of all ethanol fuel blends made after December 31, 2028.

Through November 30, 2030, sales and use taxes do not apply to diesel fuel blends containing at least 10% biodiesel (B10) or 10% renewable diesel from December 1 of each calendar year through March 31 of the following calendar year. From April 1, 2024, through November 30, 2030, diesel fuel blends are not subject to sales and use taxes if they adhere to the following blend amounts:

(Reference 35 Illinois Compiled Statues 120/2-10, 105/3-5.1, 105/3-10, and 105/3-44)