Jan 30, 2011

Biofuels Tax Credit
How to claim the Oregon Biofuels Tax credit for B-99 and E-85 fuel blends

It's tax season and we've had a few requests for more information on the biofuels tax credit for Oregon residents. 

Passed in 2007, Oregon House Bill 2210 allows Oregon residents to claim a tax credit of up to $200.00 per year for purchasing B-99 biodiesel, and E-85 ethanol fuel blends. 

"Governor Kulongoski, provides a package of measures to encourage greater development, distribution and use of agricultural and forest material for biofuels, for electricity and for other forms of biomass energy use.  The bill expands property tax incentives for biofuel and certain fuel additive production facilities, establishes a new tax credit for producers and collectors of biofuel raw materials, based on Btu content of feedstock, and creates an income tax credit for consumer use of biofuel "
courtesy of Oregon.gov

How to claim the tax credit:

(For our example we will be using the standard 2010 Oregon 40 form.)
*click on form to download*

Claiming the biofuels tax credit is a pretty straight forward process. One quick thing to note is that a tax credit is not the same as a tax deduction. A tax deduction is an expense that lowers your total taxable income. In this case with a biofuels tax credit, it is a specific dollar amount that you can subtract from your liability to the state. In short, it's less money that you have to pay the state or more money that you would get back from the state.

1.) Gather all receipts for B-99 or E-85 fuel purchased in Oregon in the 2010 calendar year and add up the total amount of gallons purchased.
*If you purchased these fuels @ the SeQuential station in Eugene the receipts should have a dollar amount per gallon as well as a gallon amount that is specific to the thousandth of a gallon.
Ex: "10.132 gallons"

2.) B-99 tax credit is $.50 per gallon & the E-85 tax credit is for $.42 per gallon.

3.) Multiply your total gallons purchased by the appropriate credit for each fuel type.

4.) Go to box #39 on the 1040 form and plug the total into the box.
                     "Biofuel Consumer (code 744)"

5.) This is the total that you subtract from your debt to the state or money that the state may owe you as a refund depending on your individual situation.

6.) That's It!

Please note that the tax credit is ONLY for B-99 and E-85 fuel blends at this time. 

The tax credit is eligible up to a maximum of $200.00 per vehicle registered in Oregon.

The tax credit is a consumer tax credit and does not fall under the business expense category

*If you are preparing your taxes on-line, most services already have the necessary information built into the program for you to fill out.


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Orthotics Calgary said...

The intent is to bring the cost down from $26 per gallon to $25 or $24. Keep in mind, the Navy's green fleet requires this stuff.

Jon Jensen said...

Is this tax credit still available for 2012 tax year?

Anonymous said...

BioI just read the instructions for the 2012 Oregon Form 40. In those instructions I did not see anything about the Biodiesel deduction. In the past it has been listed as Code 744 on the line titled "Other Credits." Is it gone?
-Larry Wikander

Anonymous said...

Barely -

It looks like this tax credit has expired. The ORS is here:


It says that it is valid only for tax years beginning before 1/1/2012, so the tax year from 1/1/2012 to 12/31/2012 would not apply.

Also, it's not in Oregon's Form 40 or the Form 40 instructions, or in the TurboTax version of said form.

Frustratingly, it still appears here:


I think that's just someone at DOR failing to update a web page, however.

- Joy

Anonymous said...

That's a bummer. I don't use biodiesel just for the tax credits, but it was nice to have $200 taken off my tax bill the past few years

Kent Search Engine Optimization said...

In reviving the credit, lawmakers made the extension retroactive to its expiration at the end of 2011. It now is set to expire at the end of this year.

The credit was one of an eclectic mix of handouts, takebacks and special-interest tax breaks included by Congress in the last-minute deal to avoid the automatic spending cuts and tax increases that otherwise would have kicked in for 2013.