State Excise/Sales Tax Exemptions, Ethanol Production Incectives and Programs

By | May 01, 2002
Alaska - >Tax Exemption: $0.06 per gallon excise tax exemption on starch to ethanol. Applies only in Anchorage and only during the winter months. No sunset. $0.08 per gallon on ethanol from biomass. Year round. Sunset: five years after startup Production Incentive: None
Other programs: NA

Connecticut - Tax Exemption: $0.01 per gallon tax excise exemption. No sunset Production Incentive: None
Other Programs: NA

Hawaii - Tax Exemption: Fuel blends of at least 10% alcohol are exempt from the 4% tax on retail sales. Sunset - December 31, 2006. Production Incentive: $0.30 per gallon investment credit for 1st 15 mmgy annually. Investment credit applies for 8-10 years depending on level of investment and is capped at 40 mmgy statewide.
Other Programs: Highway taxes on alternative fuels are 50% of the effective rate (on an energy content basis) of diesel fuel. A tax credit of 100% for investment in qualified high-technology business. Non-fossil fuel technology is included under the definition of qualified research

Idaho - Tax Exemption: Excise tax exemption is to equal the amount of ethanol blended in a gallon of gasoline - not to exceed 10%. No sunset. Average exemption is $0.025/gal Production Incentive: None
Other Programs: NA

Illinois - Tax Exemption: 30% reduction of gasoline sales tax. Current gasoline sales tax is 6.25%. Sunset - June 30, 2003
Production Incentive: None
Other Programs: Ethanol Fuel Research program extended until December 31, 2002

Iowa - Tax Exemption: $0.01sales tax exemption. Sunset - June 30, 2007 Production Incentive: None
Other Programs: A tax credit for service stations that sell 60% or more of total volume as ethanol-blended gasoline. The tax credit is $0.025 per gallon of ethanol-blended gasoline in excess of 60% of all gasoline sold.- A variety of grants and low/no-interest loans for development of a project.

Kansas - Tax Exemption: Production Incentive: $0.05 per gallon producer payment for existing producers - 3 years. $0.075 per gallon producer payment for new production capped at 15M. $3.5 million cap. Sunset - July 1, 2011
Other Programs: NA

Michigan - Tax Exemption: None Production Incentive: None Other Programs: $5,000,000 as a one-time payment was appropriated to facilitate the first ethanol production plant in Michigan.

Minnesota - Tax Exemption: No tax exemption on 10% blend. $0.058 tax exemption E85 Production Incentive: $0.20 per gallon producer payment that applies to the first 15 million gallons per plant per year for up to 10 years. $3 million annual cap per plant.
Other Programs: No ethanol label requirement. Requirement of 2.7% minimum oxygen in all gasoline.

Mississippi - Tax Exemption: None Production Incentive: $0.20 per gallon producer payment for ten years from start of production for anhydrous alcohol. $0.11 minimum per gallon of production of wet alcohol. Must be made from Mississippi-produced feedstocks. 30 million gallon annual ceiling per plant. $37 million annual cap total Other Programs: $0.015 payment to ethanol producers for each kilowatt hour of electricity generated using biomass in a cogeneration facility at the site.




Missouri - Tax Exemption: None Production Incentive: $0.20 per gallon applies to the first 12.5 million gallons. $0.05 per gallon to the next 12.5 million gallons produced. Applies to the first 60 months of plant production.
Other Programs: NA

Montana - Tax Exemption: None Production Incentive: $0.30 per gallon producer credit. $3 million cap. Sunset - July 1, 2005
Other Programs: NA

Nebraska - Tax Exemption: None Production Incentive: $0.075 per gallon for new (increased) capacity at existing facilities for up to 10 million gallons produced.
Applicable for three years. Also, $.18 per gallon for new production up to 15,625,000 gallons produced annually. There is a 96 or 48 month sunset depending on the production start date. No payments will be made after June 20, 2012. Other Programs: NA

North Carolina - Tax Exemption: None Production Incentive: None Other Programs: 25% state tax credit against corporate income tax for the cost of a renewable energy manufacturing plant and equipment. No cap on the amount. If not fully utilized the first year, it can be carried over for up to 10 years.

North Dakota - Tax Exemption: None Production Incentive:$.40 per gallon for ethanol produced and marketed by producer. $2.5 million available for current biennium (2001-2003).
Other Programs: NA

Ohio - Tax Exemption: None Production Incentive: None
Other Programs: A nonrefundable tax credit against corporation franchise or personal income tax liability for an investor in an ethanol production plant for which a certificate of approval of the plant's business plan has been issued by the Ethanol Incentive Board. The tax credit is equal to 50% of the money invested in such a plant, not to exceed $5,000. Ethanol or other biofuel production plants are eligible for loans, grants or bonds issued by the Ohio Air Quality Development Authority. Property that is part of an air quality facility is not subject to taxes or assessments so long as the bonds or notes issued to finance the costs of the facility are outstanding.

South Dakota - Tax Exemption: $0.2 excise tax exemption on E10. $0.12 exemption on E85. Production Incentive: $0.20 per gallon producer credit. $1 million per year, per plant. $10 million total cap per plant
Other Programs: NA

Wisconsin - Tax Exemption: None Production Incentive: $0.20 per gallon producer credit $3 million cap annually for entire program, limited to first 15 million gallons produced. An ethanol plant must first produce 10 million gallons before any payment is issued.
Other Programs: NA

Wyoming - Tax Exemption: None Production Incentive: $0.40 per gallon producer credit. Program has a $2 million per year cap.
Other Programs: NA


To update this list, contact:
Kathy Bryan, BBI International
719-942-4353
kathy@bbiethanol.com