Fuel Tax Updates

Biodiesel Blender’s Credit

The biodiesel blender’s credit is due to expire at the end of 2011, and at this point, no extension will be granted.  Eligible gallons of biodiesel must be blended AND sold in 2011 in order to receive the $1 per gallon federal biodiesel blender’s credit.  Biodiesel purchased and blended in 2011 but not sold until 2012 will not be eligible. 

Illinois Extends State’s Biodiesel Tax Credit Through 2018

The Illinois tax credit, previously due to expire at the end of 2013, has been extended five years through 2018.  The incentive gives complete fuel tax exemption for any blend of biodiesel greater than 10%. 

Tax Free Sales of Gasoline

Gasoline sold for the exclusive use by state, local government or non-profit education organizations are sales which are eligible for a refund of the federal gasoline excise tax.  Gasoline may be sold tax free by an Ultimate Vendor as long as the ultimate purchaser fits one of these three categories.

As a reminder, Ultimate Vendors are not immune to IRS audits, so take a moment to review the claim requirements below. 

According the IRS, the Ultimate Vendor is the appropriate party to claim a refund of taxes as long as the Ultimate Vendor is registered with the IRS.  Each claim must contain:

1. Total number of gallons covered by the claim.
2. The claimant’s registration number.
3. Statement that the claimant has sold the fuel without tax included in the price, repaid the tax to the ultimate buyer, or has written consent of the buyer to seek the claim.
4. An unexpired certificate from the buyer.   Model certificates can be found on the IRS website.  Refer to Model Certificate M or Model Certificate P.  

All information on the certificate must be current, and the certificate expires on the earlier of one year after the date of the certificate or the date a new certificate is given to the registered ultimate vendor. 
More information can be found on the IRS website.