IRS issues guidance on cellulosic biofuels tax credit

By | February 04, 2009
Qualifying cellulosic biofuels produced and sold between Dec. 31, 2008, and Jan. 1, 2013, may be eligible for tax credits. The Internal Revenue Service recently issued Notice 2008-110, which provides guidance regarding the income and excise tax credits for biodiesel and cellulosic biofuels.

The Food, Conservation and Energy Act of 2008 created an income tax credit for producers of certain cellulosic biofuels. Under the legislation, cellulosic biofuels are defined as any liquid fuel, other than low-proof alcohol, that is produced from any lignocellulosic or hemicellulosic matter available on a renewable basis. Cellulosic biofuels must also meet the registration requirements for fuels and fuel additives established by the U.S. EPA under section 211 of the Clean Air Act.

To qualify for the credit, producers must register with the secretary of the treasury, and the notice issued by the IRS provides guidance on how to register as a cellulosic biofuels producer. A complete copy of the notice can be found at www.irs.gov/pub/irs-drop/n-08-110.pdf.