As part of the financial rescue bill passed last week, there are measures that extend the biodiesel tax incentive and close the so-called "splash and dash" loophole.
According to the National Biodiesel Board, the U.S. House of Representatives approved H.R. 1424, the Emergency Economic Stabilization Act, by a 263 to 171 margin. The Senate approved the bill on Oct. 1 by a 74-25 margin. In addition to addressing the crisis facing the financial markets, H.R. 1424 contains a tax package that extends expiring tax provisions, including the biodiesel tax incentive.
Specifically, H.R. 1424:
* Extends the biodiesel tax incentive for one year through Dec. 31, 2009. The incentive is currently set to expire on Dec. 31, 2008.
* Provides that all biodiesel, regardless of feedstock used to produce the fuel, qualifies for the $1 per gallon biodiesel incentive. Currently, biodiesel produced from yellow grease is eligible for a 50 cents per gallon tax incentive.
* Closes the so-called "splash-and-dash" loophole. Splash-and-dash is where foreign finished fuel is sent to the U.S.; splash-blended to claim the tax incentive; and then shipped to a third country for final use. The legislation approved by the Senate provides that effective May 15, 2008, fuel produced outside the U.S. for use outside the U.S. does not qualify for the biodiesel tax incentive.