Biodiesel Tax

Biodiesel and biodiesel blends are taxed at the state motor fuel excise tax rate of $0.28 per gallon. Beginning the fiscal quarter after which a biodiesel production facility in the state reaches a name plate capacity of at least 20 million gallons per year and fully produces at least 10 million gallons of biodiesel within one year, the tax on biodiesel and biodiesel blends is reduced to $0.26 per gallon. Biodiesel is defined as a fuel comprised of mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal fats. Biodiesel must meet the requirements of ASTM specification D6751 and the U.S. Environmental Protection Agency registration and health effects testing program, as written January 1, 2008. Biodiesel blends are defined as blended special fuel containing a minimum of 5% biodiesel (B5). (Reference South Dakota Statutes 10-47B-3 through 10-47B-10)