Biofuels Tax Exemption

Through December 31, 2018, a sales and use tax of 6.25% applies to 100% of the proceeds from the sale of fuel blends containing 10% ethanol (E10) and to 80% of the proceeds from the sale of fuel blends containing between 1% and 10% biodiesel (B1-B10). If at any time the sales and use tax is 1.25%, the tax on biodiesel blends will apply to 100% of the proceeds of sales. Taxes will apply to 100% of the proceeds from the sale of E10 and B1-10 made after December 31, 2018.

Through December 31, 2023, sales and use taxes do not apply to the proceeds from the sale of biodiesel blends containing between 11% and 99% biodiesel (B11-B99) or fuels containing between 70% and 90% ethanol (E70-E90). Taxes will apply to 100% of the proceeds from the sale of biodiesel and ethanol fuel blends made after December 31, 2023.

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