Income Tax Incentives
Biodiesel Tax Credits
Tax Credits for Producing or Blending Biodiesel and for Crushing Soybeans or Canola
A corporation is allowed an income tax credit for adapting or adding equipment to retrofit a facility or to construct a new facility in North Dakota that either (1) produces or blends biodiesel fuel or (2) crushes soybeans or canola. The credit is equal to 10% of the direct costs incurred, and is allowed in each of five tax years, starting with the tax year in which the production, blending, or crushing begins. An unused credit may be carried forward up to five tax years. A corporation is allowed no more than $250,000 of credits for all tax years.
A licensed fuel supplier who blends at least 5% biodiesel fuel is allowed an income tax credit of five cents per gallon of blended fuel. An unused credit may be carried forward up to five tax years.
A licensed seller of biodiesel fuel having at least a 2% blend is allowed an income tax credit for adapting or adding equipment to the seller’s facility to enable it to sell the biodiesel blend. The credit is equal to 10% of the direct costs incurred, and is allowed in each of five tax years, starting with the tax year in which the facility begins selling the biodiesel fuel. An unused credit may be carried forward up to five tax years. A seller is allowed no more than $50,000 of credits for all years.
For the biodiesel supplier and seller credits only: If the supplier or seller is a passthrough entity, such as a partnership or S corporation, the credit is passed through to the entity’s owners in proportion to their respective interests in the entity.
