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On September 3, 2024, the Internal Revenue Service (IRS) announced that petitions have been filed to add the following chemicals to the list of taxable substances: Comments and requests for a public hearing are due November 4, 2024. More information on the Superfund excise tax on chemicals is available in our April 4, 2023, memorandum, “IRS Proposes Regulations Regarding Superfund Tax on Chemicals,” our July 13, 2022, memorandum, “Superfund Tax on Chemicals: What You Need...

The Internal Revenue Service (IRS) announced on February 27, 2024, that it received a petition requested that iso-butanol (also known as isobutanol, iso butyl alcohol, 2-methyl propan-1-ol, or 2-methyl-1-propanol) be added to the list of taxable substances under Section 4672(a) of the Internal Revenue Code. 89 Fed. Reg. 14558. OQ Chemicals Corporation, an exporter of iso-butanol, filed the petition. The notice states: According to the petition, iso-butanol is an isomer of n-butanol. Iso-butanol...

The Internal Revenue Service (IRS) announced on February 22, 2024, that it received petitions requesting that caprolactam (89 Fed. Reg. 13400) and nylon 6 (89 Fed. Reg. 13399) be added to the list of taxable substances under Section 4672(a) of the Internal Revenue Code. AdvanSix Inc., an exporter of caprolactam and nylon 6, filed the petitions. The notice for caprolactam states: According to the petition, caprolactam, a white solid, is primarily used to manufacture nylon...

The Internal Revenue Service (IRS) announced on July 17, 2023, that it received a petition requesting that methyl ethyl ketoxime (MEKO) be added to the list of taxable substances under Section 4672(a) of the Internal Revenue Code. 88 Fed. Reg. 45454. The petitioner is AdvanSix Inc., an exporter of MEKO. The notice includes the following description of the petition: According to the petition, MEKO is a clear liquid and a high-efficiency, anti-skinning agent that is used for...

On March 29, 2023, the Internal Revenue Service (IRS) published a notice of proposed rulemaking (NPRM) relating to the Superfund excise taxes imposed on certain chemicals and certain imported substances, effective July 1, 2022. 88 Fed. Reg. 18446. There are two separate Superfund chemical excise taxes: a tax on the sale or use of “taxable chemicals” and a tax on the sale or use of imported “taxable substances.” The NPRM contains proposed regulations under Sections 4661,...

The Internal Revenue Service (IRS) announced on December 30, 2022, that it received a petition requesting the addition of polyphenylene sulfide to the list of taxable substances under Section 4672(a) of the Internal Revenue Code. 87 Fed. Reg. 80579. The petitioner is Celanese Ltd., an exporter of polyphenylene sulfide. According to the petition, “polyphenylene sulfide is a high-performance thermoplastic, has high heat and chemical resistance, and is used in applications such as filters,...

The Internal Revenue Service (IRS) announced on January 19, 2023, that it received a petition requesting the addition of 4,4′-isopropylidenediphenol-epichlorohydrin copolymer (bisphenol A epoxy resin) to the list of taxable substances under Section 4672(a) of the Internal Revenue Code. 88 Fed. Reg. 3478. The petitioner is Westlake Epoxy Inc., an exporter of 4,4′-isopropylidenediphenol-epichlorohydrin copolymer. According to the petition, “4,4′-Isopropylidenediphenol-Epichlorohydrin...

As reported in our May 19, 2022, memorandum, the Superfund excise tax on certain chemical substances was reinstated beginning on July 1, 2022, under the Infrastructure Investment and Jobs Act. The Internal Revenue Service (IRS) announced on June 24, 2022, that it has posted frequently asked questions (FAQ) on the Superfund chemical excise tax. The IRS released Revenue Procedure 2022-26, which provides the exclusive procedures for requesting a determination under Section 4672(a)(2) of the...

The Internal Revenue Service announced on June 24, 2022, that it has posted frequently asked questions (FAQ) on the Superfund chemical excise tax. The FAQs detail what the Superfund chemical excise tax is, how the tax is computed, and who may be liable for the tax. The Superfund chemical taxes will be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. The excise taxes were reinstated beginning on July 1, 2022, under...

By Lynn L. Bergeson  On December 29, 2021, the Kentucky Commissioner of Agriculture, Dr. Ryan Quarles, announced that eligible Kentucky companies can now apply to the state’s Renewable Chemical Production Program. This program provides tax credits for capital investment, job creation, and the production of more than 30 chemicals derived from biomass feedstocks. These chemicals are limited to building block chemicals with a biobased content percentage of at least 50 percent,...

By Lynn L. Bergeson and Ligia Duarte Botelho, M.A. On March 1, 2021, U.S. Senators Joe Manchin (D-WV) and Debbie Stabenow (D-MI) announced the American Jobs in Energy Manufacturing Act of 2021 (Act), which would incentivize domestic manufacturing of energy technologies by providing tax credits for domestic manufacturers in rural areas. The Act encourages the transition to cleaner energy by driving reinvestment into communities that have been most impacted by economic downturn....

By Lynn L. Bergeson On October 8, 2020, the European Commission (EC), under the European Union (EU) State aid rules, approved the prolongation of tax exemptions for biofuels in Sweden. Having exemptions for liquid biofuels from energy and carbon emissions taxation since 2002, Sweden’s scheme aims to increase biofuels use while reducing the fossil fuels use in transport. With EC’s decision, the tax exemption has now been prolonged by one year from January 1, 2021, until...

By Lynn L. Bergeson The Iowa Economic Development Authority (IEDA) is offering the first Renewable Chemicals Production (RCP) Tax Credit in the United States. What does this mean? It means that the program provides an opportunity for industry stakeholders to advance Iowa’s economy through a focus on biomass as a feedstock for the production of renewable chemicals. As an attempt to incentivize the production of 30 high-value chemicals derived from biomass feedstocks, IEDA developed the...

By Lynn L. Bergeson On December 9, 2019, 22 Senate Democrats released a letter supporting the expansion of green energy tax credits. This letter was drafted in response to the Growing Renewable Energy and Efficiency Now (GREEN) Act discussion draft that was circulated in the U.S. House of Representatives on November 19, 2019. The Senators agree with the priorities of the GREEN Act and pledge to similarly prioritize and include: Offshore Wind Investment Tax Credit,...

By Lynn L. Bergeson On June 18, 2019, Representative Mike Thompson, (D-CA), Chair of the House Ways and Means Subcommittee on Select Revenue Measures, introduced the Taxpayer Certainty and Disaster Tax Relief Act of 2019. The bill includes: An extension of the $1-per-gallon tax credit for biodiesel and biodiesel mixtures;   An extension of the small argi-biodiesel producer credit of 10 cents per gallon through 2020;   An extension of the second generation biofuel producer...

By Lynn L. Bergeson On June 3, 2019, 19 members of Congress submitted a letter to U.S. Speaker of the House, Nancy Pelosi (D-CA), and Chair of the House Committee on Ways & Means, Richard Neal (D-MA), addressing the expired Second-Generation Biofuel Producer Tax Credit, the Special Depreciation Allowance for Second-Generation Biofuel Plant Property, and the Alternative Fuel Vehicle Refueling Property Credits. Urging Congress to take action on the extension of these tax credits, the...

By Lynn L. Bergeson On May 25, 2018, the National Biodiesel Board (NBB) dropped its nearly decade long pursuit to convert a $1-per-gallon tax credit for biofuel blenders to an equivalent credit for producers. NBB originally sought to change the credit to support the domestic biofuel industry, as some blenders who benefited from the credit were also importing foreign biodiesel. Recent import duties imposed by the U.S. Commerce Department have done a great deal to curb...

Princeton University, “Researchers Use Light to Turn Yeast into Biochemical Factories” Biodiesel, “NBB Again Disappointed by Failure to Renew Biodiesel Tax Credit” Biodiesel Magazine, “DOJ Must Maintain Integrity of RFS, Reject PES Settlement” Reuters, “U.S. Asks Brazil to Review Ethanol Quotas in Tariff Talks – Industry Group” Berkeley Lab, “Sewage Sludge Leads to Biofuels Breakthrough”...

By Lauren M. Graham, Ph.D. As explained in the notice issued by Neste, a member of the Biobased and Renewable Products Advocacy Group (BRAG®), with President Trump’s signing of the Bipartisan Budget Act of 2018 (H.R. 1892), the blenders tax credit was extended retroactively for 2017.  Qualified biofuel blenders are eligible for a tax credit of $1.00 per gallon of biodiesel or renewable diesel used in the blending process in 2017.  The blenders tax credit was...

By Kathleen M. Roberts On October 25, 2017, bipartisan legislation aimed at leveling the playing field between renewable and fossil fuels was re-introduced in the Senate and House of Representatives.  Senator Chris Coons (D-DE), along with eight bipartisan co-sponsors, introduced the Master Limited Partnerships Parity Act (S. 2005) in the Senate.  Representative Ted Poe (R-TX), along with six co-sponsors, introduced similar legislation (H.R. 4118) in the House.  The...

By Kathleen M. Roberts The National Biodiesel Board (NBB) announced that on September 13, 2017, New York Governor Andrew Cuomo signed legislation that introduces bioheating fuel tax credits and bioheating fuel tax requirements to three New York counties.  The bill (S5422A) requires all home heating oil sold for use in Nassau, Suffolk, and Westchester counties on or after July 1, 2018, to contain at least five percent biodiesel (B5).  Assemblyman Steve Englebright and Senator Phil...

By Lauren M. Graham, Ph.D. On June 29, 2017, Representatives Bill Pascrell (D-NJ), Ryan Costello (R-PA), Brian Fitzpatrick (R-PA), and Linda Sánchez (D-CA) introduced the Renewable Chemicals Act of 2017 to the House.  If enacted, the legislation would create a targeted, short-term tax credit for the production of qualifying renewable chemicals from biomass and for investments in renewable chemical production facilities.  The tax credit would be provided based on job...

By Kathleen M. Roberts On June 20, 2017, the National Biodiesel Board (NBB) announced that nearly 100 biodiesel advocates from across the country visited Capitol Hill to urge Congress to bring back the biodiesel tax incentive as proposed in both chambers of Congress.  Industry participants consisted of biodiesel producers, distributors, and feedstock suppliers from over 24 states.  According to Anne Steckel, the Vice President of Federal Affairs at NBB, the bipartisan biodiesel...

By Lauren M. Graham, Ph.D. On May 5, 2017, Senator Ron Wyden (D-OR) introduced to the Senate Finance Committee legislation focused on reducing carbon pollution over the next decade by incentivizing clean energy and promoting new technologies in the private sector.  The Clean Energy for America Act, which was co-sponsored by 21 Democratic Senators, provides a simplified set of long-term, performance-based energy tax incentives to promote clean energy production and storage.  The...

By Lauren M. Graham, Ph.D. On April 26, 2017, a bipartisan bill was introduced in the U.S. Senate to reform the biodiesel tax credit and extend the new policy for three years.  The American Renewable Fuel and Job Creation Act of 2017, which was sponsored by Senator Chuck Grassley (R-IA), Senator Maria Cantwell (D-WA), and 14 other senators, transfers the $1 gallon tax credit from the blenders to the producers of biofuels to ensure that it...

By Kathleen M. Roberts On April 13, 2017, the Iowa Renewable Fuels Association (IRFA) released a statement regarding the passage of a bill, HSB 187, by the Iowa House Appropriations Committee that would cut the value of the Iowa biofuels tax credits and complicate the mechanism for receiving the credit.  According to the bill, the value of the tax credits would be determined based on annual sales, and the amount of the credits would be capped...

The New York State Clean Heating Fuel Tax Credit has been extended through 2020.  The personal income tax credit, which was initially authorized in 2006, is provided to eligible taxpayers for biodiesel purchases used for residential space and water heating.  For each percent of biodiesel blended with conventional home heating oil, a tax credit of $0.01/gallon is available up to a maximum of $0.20/gallon.  A partial credit will be calculated for buildings with a shared...

On October 18, 2016, the Biotechnology Innovation Organization (BIO) sent a letter to Congressional Leadership, the Senate Finance Committee Chairs, and the House Ways and Means Committee Chairs calling for the extension of expiring renewable energy tax credits.  The Second Generation Biofuel Producer Tax Credit, the Special Depreciation Allowance for Second Generation Biofuel Plant Property, the Biodiesel and Renewable Diesel Fuels Credit, and the Alternative Fuel Vehicle Refueling...

On September 12, 2016, the  Biodiesel and Renewable Diesel Incentive Extension Act of 2016 (H.R. 5994) was introduced to the House of Representatives and referred to the House Committee on Ways and Means. The bill was introduced by Representative Diane Black (R-TN), and would extend the $1 per gallon biodiesel and renewable diesel blenders credit, originally set to expire December 31, 2016, through  December 31, 2018. The blenders tax credit of $1 was created in...

? The Hill, "Energy Groups Push For Renewal Of Tax Credits" ? Neste, "Neste and Ikea of Sweden Announce Partnership to Deliver Renewable, Bio-Based Plastics" ? Packaging Europe, "Croda Offers CrodaTherm™ 21 for Temperature Controlled Packaging Applications" ? The University of New Orleans, "UNO Computer Science Faculty Awarded More Than $500k for Vital Research" ? Airforce Technology, "US Air Force to Produce Biofuels for US DoD...

On August 24, 2016, Brazil's government announced that it would not be extending a tax break on ethanol sales that is due to expire in December 2016. During the 2015 Paris Climate Accord, Brazil pledged to increase cane-based ethanol and biodiesel to nearly 18 percent of its total energy mix by 2030, requiring an increase in annual ethanol production from 30 billion liters in 2015/2016 to 50 billion liters in 2030. The loss of the...

On July 6, 2016, Hawaii Governor David Ige signed SB 2652 Related to Taxation — Locally Produced Renewable Energy. This bill establishes a five-year renewable fuels production tax credit. The tax credit will take effect in 2017 and will provide 20 cents per gallon of ethanol (or 76,000 British thermal units (Btu) of renewable fuel) with a cap of $3 million. The tax credit is open to companies producing at least 15 billion Btu of...

On June 15, 2016, H.R. 5489, Agriculture Environmental Stewardship Act of 2016, was introduced to the House Ways and Means Committee on Science, Space, and Technology. The bill would add additional biogas applications to the list of technologies that qualify for the federal Section 45 energy investment tax credit, increasing acceptable biogas technologies from only biogas-based electricity projects to "qualified biogas property" defined as: property comprising a system which–...

On May 24, 2016, Iowan Governor Terry Branstad signed Senate File 2309, an Act providing for tax credits and refunds relating to renewable fuels including their component biofuels and including effective date provisions. The bill extends a state biodiesel production tax credit providing 2 cents per gallon (cpg) on the first 25 million gallons of production per biodiesel plant. The bill also extends a credit for petroleum retailers of 4.5 cpg on blends of 5...

On November 10, 2015, Senator Stabenow (D-MI), along with Senators Coons (D-DE) and Franken (D-MN), introduced S. 2271, the Renewable Chemicals Act of 2015 to the Senate. If passed, the bill would amend the Internal Revenue Code of 1986 to create short-term tax credits for the production of renewable chemicals and for investments in renewable chemical production facilities. Producing eligible renewable chemicals from biomass feedstock would result in a tax credit of 15 cents per...

On June 17, 2015, the Australian government made a bipartisan agreement to tax Australian-produced biodiesel and ethanol. Cleaner fuel grants for renewable and biobased diesel fuels will end by July 1, 2015, as will the Ethanol production grant. An excise rate on biodiesel will be phased in starting in 2015-2016 at zero percent, and will increase annually, eventually reaching 50 percent of the diesel excise rate in 2030-2031. The Biofuels Association of Australia approved of...

On September 18, 2014, Representatives Earl Blumenauer (D-OR) and Dave Loebsack (D-IA), along with 16 other Members of Congress, introduced H.R. 5559, the Bridge to a Clean Energy Future Act of 2014. A copy of Representative Blumenauer's statement on the bill is available online. H.R. 5559 is the House counterpart to S. 2260, the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act. The package of tax extenders was approved by the Senate Finance Committee in...

On April 8, 2014, House Committee on Ways and Means Chair Dave Camp (R-MI) held a hearing on the "Benefits of Permanent Tax Policy for America's Job Creators." The hearing focused on the expiring business tax provisions that are made permanent or extended under Camp's recently released discussion draft of the "Tax Reform Act of 2014" (TRA). Unlike his Senate counterpart — Senate Committee on Finance Chair Ron Wyden (D-OR) — Camp is not very...

On April 3, 2014, the Senate Committee on Finance marked up its version of a tax extenders package, the "Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act." The EXPIRE Act includes extensions through December 31, 2015 (and retroactive to January 1, 2014) of the following key biofuels incentives that have expired: the Alternative Fuel Refueling Property Credit; the Second Generation Biofuel Producer Tax Credit; the Special Depreciation Allowance for Second Generation...

This week, the non-partisan Joint Committee on Taxation released its score of S. 795, the Master Limited Partnerships Parity Act, a bi-partisan bill introduced by Senator Chris Coons (D-DE) earlier this year. The Committee estimated that the bill would cost $1.3 billion over ten years. Reportedly, Senator Coons welcomed the score and has committed to trying to find an offset or spending cut to pay for it. The Chair of the Senate Finance Committee's Subcommittee...

The Internal Revenue Service (IRS) has released an advice memorandum from the agency's Office of Chief Counsel determining that "[b]y electing the § 6426(c) excise tax credit [biodiesel mixture credit] and/or the § 6427(e) excise tax payment instead of the § 40A income tax credit, a blender is not required by § 87 or by § 61 to include in its gross income the amount of the § 6426(c) excise tax credits and/or the §...