Ricketts signs bill creating tax credit for higher ethanol blends

By Erin Voegele | April 20, 2022

Nebraska Gov. Pete Ricketts on April 19 signed legislation that includes a provision that provides tax credits for fuel retailers that sell E15 or higher blends of ethanol. The credit is 5 cents per gallon of E15 and 8 cents per gallon of E25 or higher blends sold.

The bill, LB 1261e, also extends the Nebraska Advantage Rural Development Act, which was set to expire at the end of the year. In addition, it expands the Nebraska Advantage Rural Development incentive program. The ethanol tax credit provisions of the bill were originally included in SB 596, which was later incorporated into LB 1261e.

The ethanol fuel retailer credit can be claimed by any taxpayer who is a retail dealer and who sold and dispensed E15 or higher blends on a retail basis during the prior calendar year through a motor fuel pump located at the taxpayer’s retail motor fuel site. The credit is capped at $2 million for calendar year 2022. That cap could be raised to as high as $4 million per calendar year in the future using a calculation that takes into account the prior year's use of the credit. The application period for the credit sunsets at the end of 2026.

“LB 1261e will help to grow Nebraska agriculture and attract investment in our rural communities,” Ricketts said.  “The bill also encourages fuel retailers to offer higher ethanol blends.  Increasing the use of ethanol saves drivers money at the pump, cleans up our environment, and creates opportunities for our farmers and ranchers.”

Additional information, including a full copy of the bill, is available on the Nebraska Legislature website.