Bill aims to extend biofuel, bioenergy tax credits through 2020

By Erin Voegele | June 20, 2019

Rep. Mike Thompson, D-Calif., chairman of the House Ways and Means Subcommittee on Select Revenue Measures, introduced the Taxpayer Certainty and Disaster Tax Relief Act of 2019 on June 18. The bill extends several biofuel- and bioenergy-related tax credits. The legislation was scheduled for markup on June 20.

“For far too long, Congress has not extended important tax provisions in a forward-looking basis, resulting in confusion and uncertainty for taxpayers,” Thompson said. “This week, we take the first step forward in untangling this mess. The Taxpayer Certainty and Disaster Tax Relief Act of 2019 extends a number of provisions that expired at the end of 2017 and 2018 and that will expire at the end of this year and the bill is a critical piece of doing right by the taxpayer.”

According to information provided by Thompson’s office, the bill would extend the $1-per-gallon tax credit for biodiesel and biodiesel mixtures, and the small argi-biodiesel producer credit of 10 cents per gallon through 2020. The bill treats renewable diesel the same as biodiesel, except there is no small producer credit.

The second generation biofuel producer credit would also be extended through 2020. The bill provides a $1.01-per-gallon nonrefundable income tax credit for second generation biofuel sold at retail into the fuel tank of a buyer’s vehicle, or second generation biofuel mixed with gasoline or a special fuel and sold or used as fuel. This provision was previously known as the cellulosic biofuel producer credit.

The legislation aims to extend the alternative fuel refueling property credit through 2020. The bill provides a credit for the installation of alternative fuel vehicle refueling property, which includes property that dispenses alternative fuels including ethanol, biodiesel, natural gas, hydrogen and electricity. The credit is capped at $30,000 per location for business property and $1,000 for property installed at a principal residence.

In addition, the legislation extends the special allowance for second generation biofuel plant property through 2020. It also provides an additional first-year 50 percent bonus depreciation for cellulosic biofuel facilities.

The bill also addresses tax credits for bioenergy production and biomass stoves.

The section 45 tax credit for renewable energy would be extended through 2020, or one year in the case of wind facilities.

The bill also extends the credit for purchases of nonbusiness energy property through 2020. The bill allows a credit of 10 percent of the amounts paid or incurred by the taxpayer for qualified energy improvements to the building envelope of principal residences. Under the provision, it also allows credits of fixed dollar amounts ranging from $50 to $300 for energy-efficient property, including biomass stoves, furnaces, boilers, heat pumps, water heaters, central air circulating fans, and is subject to a lifetime cap of $500.

Additional information on Taxpayer Certainty and Disaster Tax Relief Act of 2019, or H.R. 3301, is available on the Congress.gov website