27 May Tax Incentives for Ethanol
Posted at 00:00h in Tax Credit
Biofuels have been embraced by supporters from President George W. Bush to the Natural Resources Defense Council. Before 1930, the U.S. Treasury focused on shutting down small alcohol producers. After 1978, U.S. energy policy sought to encourage ethanol production to reduce dependence on foreign oil. Federal and state incentives have been credited with increasing ethanol production from 175 million gallons in 1980 to 3.9 billion gallons in 2005.
The Internal Revenue Code contains three income tax credits designed to encourage ethanol use:
Alcohol mixture credit
Pure alcohol credit
Small ethanol producer’s credit