26 U.S.C. § 40A
For purposes of section 38, the biodiesel fuels credit determined under this section for the taxable year is an amount equal to the sum of-
For purposes of this section-
The biodiesel mixture credit of any taxpayer for any taxable year is $1.00 for each gallon of biodiesel used by the taxpayer in the production of a qualified biodiesel mixture.
The term "qualified biodiesel mixture" means a mixture of biodiesel and diesel fuel (as defined in section 4083(a)(3)), determined without regard to any use of kerosene, which-
Biodiesel used in the production of a qualified biodiesel mixture shall be taken into account-
No credit shall be allowed under this section with respect to any casual off-farm production of a qualified biodiesel mixture.
The biodiesel credit of any taxpayer for any taxable year is $1.00 for each gallon of biodiesel which is not in a mixture with diesel fuel and which during the taxable year-
No credit shall be allowed under subparagraph (A)(i) with respect to any biodiesel which was sold in a retail sale described in subparagraph (A)(ii).
No credit shall be allowed under paragraph (1) or (2) of subsection (a) unless the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer or importer of the biodiesel which identifies the product produced and the percentage of biodiesel and agri-biodiesel in the product.
The small agri-biodiesel producer credit of any eligible small agri-biodiesel producer for any taxable year is 10 cents for each gallon of qualified agri-biodiesel production of such producer.
For purposes of this paragraph, the term "qualified agri-biodiesel production" means any agri-biodiesel which is produced by an eligible small agri-biodiesel producer, and which during the taxable year-
The qualified agri-biodiesel production of any producer for any taxable year shall not exceed 15,000,000 gallons.
The amount of the credit determined under this section with respect to any biodiesel shall be properly reduced to take into account any benefit provided with respect to such biodiesel solely by reason of the application of section 6426 or 6427(e).
For purposes of this section-
The term "biodiesel" means the monoalkyl esters of long chain fatty acids derived from plant or animal matter which meet-
Such term shall not include any liquid with respect to which a credit may be determined under section 40 or 40B.
The term "agri-biodiesel" means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds, and camelina, and from animal fats.
If-
then there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(1)(A) and the number of gallons of such biodiesel in such mixture.
If-
then there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(2)(A) and the number of gallons of such biodiesel.
If-
then there is hereby imposed on such person a tax equal to 10 cents a gallon for each gallon of such agri-biodiesel.
All provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under subparagraph (A) or (B) as if such tax were imposed by section 4081 and not by this chapter.
Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.
No credit shall be determined under this section with respect to any biodiesel which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term "United States" includes any possession of the United States.
For purposes of this section-
The term "eligible small agri-biodiesel producer" means a person who, at all times during the taxable year, has a productive capacity for agri-biodiesel not in excess of 60,000,000 gallons.
For purposes of the 15,000,000 gallon limitation under subsection (b)(4)(C) and the 60,000,000 gallon limitation under paragraph (1), all members of the same controlled group of corporations (within the meaning of section 267(f)) and all persons under common control (within the meaning of section 52(b) but determined by treating an interest of more than 50 percent as a controlling interest) shall be treated as 1 person.
In the case of a partnership, trust, S corporation, or other pass-thru entity, the limitations contained in subsection (b)(4)(C) and paragraph (1) shall be applied at the entity level and at the partner or similar level.
For purposes of this subsection, in the case of a facility in which more than 1 person has an interest, productive capacity shall be allocated among such persons in such manner as the Secretary may prescribe.
The Secretary may prescribe such regulations as may be necessary-
In the case of a cooperative organization described in section 1381(a), any portion of the credit determined under subsection (a)(3) for the taxable year may, at the election of the organization, be apportioned pro rata among patrons of the organization on the basis of the quantity or value of business done with or for such patrons for the taxable year.
An election under clause (i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year. Such election shall not take effect unless the organization designates the apportionment as such in a written notice mailed to its patrons during the payment period described in section 1382(d).
The amount of the credit not apportioned to patrons pursuant to subparagraph (A) shall be included in the amount determined under subsection (a)(3) for the taxable year of the organization.
The amount of the credit apportioned to patrons pursuant to subparagraph (A) shall be included in the amount determined under such subsection for the first taxable year of each patron ending on or after the last day of the payment period (as defined in section 1382(d)) for the taxable year of the organization or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from the cooperative of the apportionment.
If the amount of the credit of the organization determined under such subsection for a taxable year is less than the amount of such credit shown on the return of the organization for such year, an amount equal to the excess of-
shall be treated as an increase in tax imposed by this chapter on the organization. Such increase shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.
For purposes of this title-
Except as provided in paragraph (2), renewable diesel shall be treated in the same manner as biodiesel.
Subsection (b)(4) shall not apply with respect to renewable diesel.
The term "renewable diesel" means liquid fuel derived from biomass which meets-
Such term shall not include any liquid with respect to which a credit may be determined under section 40. Such term does not include any fuel derived from coprocessing biomass with a feedstock which is not biomass. For purposes of this paragraph, the term "biomass" has the meaning given such term by section 45K(c)(3).
This section shall not apply to any sale or use after December 31, 2024.
26 U.S.C. § 40A
EDITORIAL NOTES
CODIFICATIONPub. L. 110-234 and Pub. L. 110-246 made identical amendments to this section. The amendments by Pub. L. 110-234 were repealed by section 4(a) of Pub. L. 110-246.
AMENDMENTS2022-Subsec. (d)(1). Pub. L. 117-169, §13203(c)(1), inserted "or 40B" after "determined under section 40" in concluding provisions.Subsec. (f)(4). Pub. L. 117-169, §13203(c)(2), struck out par. (4) which defined renewable diesel to include certain aviation fuel.Subsec. (g). Pub. L. 117-169, §13201(a), substituted "December 31, 2024" for "December 31, 2022".2019-Subsec. (g). Pub. L. 116-94 substituted "December 31, 2022" for "December 31, 2017". 2018-Subsec. (g). Pub. L. 115-123 substituted "December 31, 2017" for "December 31, 2016".2015-Subsec. (g). Pub. L. 114-113 substituted "December 31, 2016" for "December 31, 2014".2014-Subsec. (g). Pub. L. 113-295 substituted "December 31, 2014" for "December 31, 2013". 2013-Subsec. (g). Pub. L. 112-240 substituted "December 31, 2013" for "December 31, 2011".2010-Subsec. (g). Pub. L. 111-312 substituted "December 31, 2011" for "December 31, 2009".2008-Subsec. (b)(1)(A), (2)(A). Pub. L. 110-343, §202(b)(1), substituted "$1.00" for "50 cents". Subsec. (b)(3) to (5). Pub. L. 110-343, §202(b)(3)(A), redesignated pars. (4) and (5) as (3) and (4), respectively, and struck out heading and text of former par. (3). Text read as follows: "In the case of any biodiesel which is agri-biodiesel, paragraphs (1)(A) and (2)(A) shall be applied by substituting '$1.00' for '50 cents'."Subsec. (d)(1). Pub. L. 110-246, §15321(f)(1), inserted concluding provisions.Subsec. (d)(2). Pub. L. 110-343, §202(f), substituted "mustard seeds, and camelina" for "and mustard seeds". Subsec. (d)(3)(C)(ii). Pub. L. 110-343, §202(b)(3)(D), substituted "subsection (b)(4)(B)" for "subsection (b)(5)(B)". Subsec. (d)(5). Pub. L. 110-343, §203(b), added par. (5).Subsec. (e)(2), (3). Pub. L. 110-343, §202(b)(3)(C), substituted "subsection (b)(4)(C)" for "subsection (b)(5)(C)".Subsec. (f)(2). Pub. L. 110-343, §202(b)(3)(B), amended heading and text of par. (2) generally. Prior to amendment, text read as follows:"(A) RATE OF CREDIT.-Subsections (b)(1)(A) and (b)(2)(A) shall be applied with respect to renewable diesel by substituting '$1.00' for '50 cents'."(B) NONAPPLICATION OF CERTAIN CREDITS.-Subsections (b)(3) and (b)(5) shall not apply with respect to renewable diesel."Subsec. (f)(3). Pub. L. 110-343, §202(d), in introductory provisions, struck out "(as defined in section 45K(c)(3))" after "derived from biomass" and, in concluding provisions, inserted at end "Such term does not include any fuel derived from coprocessing biomass with a feedstock which is not biomass. For purposes of this paragraph, the term 'biomass' has the meaning given such term by section 45K(c)(3)." Pub. L. 110-343, §202(c)(1), (2), in introductory provisions, substituted "liquid fuel" for "diesel fuel" and struck out "using a thermal depolymerization process" before "which meets-". Pub. L. 110-246, §15321(f)(2), inserted concluding provisions.Subsec. (f)(3)(B). Pub. L. 110-343, §202(c)(3), inserted ", or other equivalent standard approved by the Secretary" before period at end.Subsec. (f)(4). Pub. L. 110-343, §202(e), added par. (4).Subsec. (g). Pub. L. 110-343, §202(a), substituted "December 31, 2009" for "December 31, 2008".2005- Pub. L. 109-58, §1346(b)(1), inserted "and renewable diesel" after "Biodiesel" in section catchline.Subsec. (a). Pub. L. 109-58, §1345(a), reenacted heading without change and amended text of subsec. (a) generally. Prior to amendment, text read as follows: "For purposes of section 38, the biodiesel fuels credit determined under this section for the taxable year is an amount equal to the sum of-"(1) the biodiesel mixture credit, plus"(2) the biodiesel credit." Subsec. (b). Pub. L. 109-58, §1345(d)(2), substituted ", biodiesel credit, and small agri-biodiesel producer credit" for "and biodiesel credit" in heading.Subsec. (b)(4). Pub. L. 109-58, §1345(d)(1), substituted "paragraph (1) or (2) of subsection (a)" for "this section".Subsec. (b)(5). Pub. L. 109-58, §1345(b), added par. (5).Subsec. (b)(5)(B). Pub. L. 109-135 struck out "(determined without regard to the last sentence of subsection (d)(2))" after "any agri-biodiesel" in introductory provisions.Subsec. (d)(3)(C), (D). Pub. L. 109-58, §1345(d)(3), added subpar. (C) and redesignated former subpar. (C) as (D). The words following "subsection (b)(5)(B)," in subpar. (C) are shown as a flush provision notwithstanding directory language showing them as part of cl. (ii), to reflect the probable intent of Congress.Subsec. (e). Pub. L. 109-58, §1345(c), added subsec. (e). The words following "subparagraph (A) for the taxable year," in subsec. (e)(6)(B)(iii) are shown as a flush provision notwithstanding directory language showing them as part of subcl. (II), to reflect the probable intent of Congress. Former subsec. (e) redesignated (f). Pub. L. 109-58, §1344(a), substituted "2008" for "2006".Subsec. (f). Pub. L. 109-58, §1346(a), added subsec. (f). Former subsec. (f) redesignated (g). Pub. L. 109-58, §1345(c), redesignated subsec. (e) as (f).Subsec. (g). Pub. L. 109-58, §1346(a), redesignated subsec. (f) as (g).
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2022 AMENDMENT Pub. L. 117-169, §13201(f), Aug. 16, 2022, 136 Stat. 1932, provided that: "The amendments made by this section [amending this section and sections 6426 and 6427 of this title] shall apply to fuel sold or used after December 31, 2021."Amendment by section 13203(c) of Pub. L. 117-169 applicable to fuel sold or used after Dec. 31, 2022, see section 13203(f) of Pub. L. 117-169, set out as an Effective Date note under section 40B of this title.
EFFECTIVE DATE OF 2019 AMENDMENT Pub. L. 116-94, div. Q, title I, §121(a)(2), Dec. 20, 2019, 133 Stat. 3230, provided that: "The amendment made by this subsection [amending this section] shall apply to fuel sold or used after December 31, 2017."
EFFECTIVE DATE OF 2018 AMENDMENT Pub. L. 115-123, div. D, title I, §40407(a)(2), Feb. 9, 2018, 132 Stat. 149, provided that: "The amendment made by this subsection [amending this section] shall apply to fuel sold or used after December 31, 2016."
EFFECTIVE DATE OF 2015 AMENDMENT Pub. L. 114-113, div. Q, title I, §185(a)(2), Dec. 18, 2015, 129 Stat. 3073, provided that: "The amendment made by this subsection [amending this section] shall apply to fuel sold or used after December 31, 2014."
EFFECTIVE DATE OF 2014 AMENDMENT Pub. L. 113-295, div. A, title I, §153(b), Dec. 19, 2014, 128 Stat. 4021, provided that: "The amendment made by this section [amending this section] shall apply to fuel sold or used after December 31, 2013."
EFFECTIVE DATE OF 2013 AMENDMENT Pub. L. 112-240, §405(c), Jan. 2, 2013, 126 Stat. 2340, provided that: "The amendments made by this section [amending this section and sections 6426 and 6427 of this title] shall apply to fuel sold or used after December 31, 2011."
EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111-312, §701(d), Dec. 17, 2010, 124 Stat. 3310, provided that: "The amendments made by this section [amending this section and sections 6426 and 6427 of this title] shall apply to fuel sold or used after December 31, 2009."
EFFECTIVE DATE OF 2008 AMENDMENT Pub. L. 110-343, div. B, title II, §202(g), Oct. 3, 2008, 122 Stat. 3833, provided that:"(1) IN GENERAL.-Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 6426 and 6427 of this title] shall apply to fuel produced, and sold or used, after December 31, 2008. "(2) COPRODUCTION OF RENEWABLE DIESEL WITH PETROLEUM FEEDSTOCK.-The amendment made by subsection (d) [amending this section] shall apply to fuel produced, and sold or used, after the date of the enactment of this Act [Oct. 3, 2008]."Amendment by section 203(b) of Pub. L. 110-343 applicable to claims for credit or payment made on or after May 15, 2008, see section 203(d) of Pub. L. 110-343, set out as a note under section 40 of this title.Amendment of this section and repeal of Pub. L. 110-234 by Pub. L. 110-246 effective May 22, 2008, the date of enactment of Pub. L. 110-234, except as otherwise provided, see section 4 of Pub. L. 110-246, set out as an Effective Date note under section 8701 of Title 7, Agriculture.Amendment by section 15321(f) of Pub. L. 110-246 applicable to fuel produced after Dec. 31, 2008, see section 15321(g) of Pub. L. 110-246, set out as a note under section 40 of this title.
EFFECTIVE DATE OF 2005 AMENDMENT Pub. L. 109-58, §1344(b), Aug. 8, 2005, 119 Stat. 1052, provided that: "The amendments made by this section [amending this section and sections 6426 and 6427 of this title] shall take effect on the date of the enactment of this Act [Aug. 8, 2005]." Pub. L. 109-58, §1345(e), Aug. 8, 2005, 119 Stat. 1055, provided that: "The amendments made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [Aug. 8, 2005]." Pub. L. 109-58, §1346(c), Aug. 8, 2005, 119 Stat. 1056, provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to fuel sold or used after December 31, 2005."
EFFECTIVE DATESection applicable to fuel produced, and sold or used, after Dec. 31, 2004, in taxable years ending after such date, see section 302(d) of Pub. L. 108-357, set out as an Effective Date of 2004 Amendment note under section 38 of this title.
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.
- taxpayer
- The term "taxpayer" means any person subject to any internal revenue tax.
- trade or business
- The term "trade or business" includes the performance of the functions of a public office.