United States

Biodiesel production credit proposed by Sens. Grassley and Cantwell


On July 13, 2016, Sen. Chuck Grassley, R-Iowa, and Sen. Maria Cantwell, D-Wash., announced the introduction of S. 3188, the “Biodiesel Tax Incentive Reform and Extension Act of 2016.”

The proposed legislation would make changes to the portions of the tax code covering biodiesel credits and excise tax credits for biodiesel mixtures. Most notably, the legislation would make the credits available only for domestic producers of biodiesel and would eliminate the income and excise tax credits for blenders of biodiesel mixtures.

The current version of the credit allows for a combination of the biodiesel credit and the biodiesel mixture credit although it is set to expire Dec. 31, 2016. The proposed bill would extend this reformed version of the credit through 2019.

If your business purchases biodiesel from outside vendors to blend into biodiesel mixtures, it would no longer be eligible for any biodiesel credit. You should consult with your tax advisor regarding implications of the bill, if it should pass.

Tom Windram


Tom leads the technical research and analysis for RSM’s federal credits and incentives team nationally. Reach him at tom.windram@rsmus.com.

Areas of focus: Federal Credits & IncentivesWashington National Tax