February 11, 2006

Energy Policy Act of 2005 (EPACT) Tax Credits

There are a number of tax breaks that were introduced with the passage of the Energy Policy Act of 2005. Aside from tax credits for purchasing certain fuel economical vehicles and enhancements to homes and businesses that make them more fuel efficient, the Act includes some alternative fuel production and distribution bonuses:


Energy Policy Act of 2005 (EPACT) Tax Credits
Biodiesel/Alternative Fuels

Small producer biodiesel and ethanol credit.
This credit will benefit small agri-biodiesel producers by giving them a 10 cent per gallon tax credit for up to 15 million gallons of agri-biodiesel produced. In addition, the limit on production capacity for small ethanol producers increased from 30 million to 60 million gallons. This is effective until the end of 2008.

Credit for installing alternative fuel refueling property.
Fueling stations are eligible to claim a 30% credit for the cost of installing clean-fuel vehicle refueling equipment, (e.g. E85 ethanol pumping stations). Under the provision, a clean fuel is any fuel that consists of at least 85% ethanol, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, or hydrogen and any mixture of diesel fuel and biodiesel containing at least 20% biodiesel. This is effective through December 31, 2010.

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