26 USC 6426 - Credit for alcohol fuel, biodiesel, and alternative fuel mixtures

U.S Code last checked for updates: Nov 22, 2024

§ 6426.

Credit for alcohol fuel, biodiesel, and alternative fuel mixtures

(a)

Allowance of credits

There shall be allowed as a credit—

(1)

against the tax imposed by section 4081 an amount equal to the sum of the credits described in subsections (b), (c), (e), and (k), and

(2)

against the tax imposed by section 4041 an amount equal to the sum of the credits described in subsection (d).

No credit shall be allowed in the case of the credits described in subsections (d) and (e) unless the taxpayer is registered under section 4101.

(b)

Alcohol fuel mixture credit

(1)

In general

(2)

Applicable amount

For purposes of this subsection—

(A)

In general

Except as provided in subparagraphs (B) and (C), the applicable amount is—

(i)

in the case of calendar years beginning before 2009, 51 cents, and

(ii)

in the case of calendar years beginning after 2008, 45 cents.

(B)

Mixtures not containing ethanol

(C)

Reduction delayed until annual production or importation of 7,500,000,000 gallons

(3)

Alcohol fuel mixture

For purposes of this subsection, the term “alcohol fuel mixture” means a mixture of alcohol and a taxable fuel which—

(A)

is sold by the taxpayer producing such mixture to any person for use as a fuel, or

(B)

is used as a fuel by the taxpayer producing such mixture.

For purposes of subparagraph (A), a mixture produced by any person at a refinery prior to a taxable event which includes ethyl tertiary butyl ether or other ethers produced from alcohol shall be treated as sold at the time of its removal from the refinery (and only at such time) to another person for use as a fuel.

(4)

Other definitions

For purposes of this subsection—

(A)

Alcohol

The term “alcohol” includes methanol and ethanol but does not include—

(i)

alcohol produced from petroleum, natural gas, or coal (including peat), or

(ii)

alcohol with a proof of less than 190 (determined without regard to any added denaturants).

Such term also includes an alcohol gallon equivalent of ethyl tertiary butyl ether or other ethers produced from such alcohol.

(B)

Taxable fuel

(5)

Volume of alcohol

(6)

Termination

(c)

Biodiesel mixture credit

(1)

In general

(2)

Applicable amount

(3)

Biodiesel mixture

For purposes of this section, the term “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—

(A)

is sold by the taxpayer producing such mixture to any person for use as a fuel, or

(B)

is used as a fuel by the taxpayer producing such mixture.

(4)

Certification for biodiesel

(5)

Other definitions

(6)

Termination

(d)

Alternative fuel credit

(1)

In general

(2)

Alternative fuel

For purposes of this section, the term “alternative fuel” means—

(A)

liquefied petroleum gas,

(B)

P Series Fuels (as defined by the Secretary of Energy under section 13211(2) of title 42, United States Code),

(C)

compressed or liquefied natural gas,

(D)

any liquid fuel which meets the requirements of paragraph (4) and which is derived from coal (including peat) through the Fischer-Tropsch process,

(E)

compressed or liquefied gas derived from biomass (as defined in section 45K(c)(3)), and

(F)

liquid fuel derived from biomass (as defined in section 45K(c)(3)).

Such term does not include ethanol, methanol, biodiesel, or any fuel (including lignin, wood residues, or spent pulping liquors) derived from the production of paper or pulp.

(3)

Gasoline gallon equivalent

(4)

Carbon capture requirement

(A)

In general

(B)

Applicable percentage

For purposes of subparagraph (A), the applicable percentage is—

(i)

50 percent in the case of fuel produced after September 30, 2009, and on or before December 30, 2009, and

(ii)

75 percent in the case of fuel produced after December 30, 2009.

(5)

Termination

(e)

Alternative fuel mixture credit

(1)

In general

(2)

Alternative fuel mixture

For purposes of this section, the term “alternative fuel mixture” means a mixture of alternative fuel (other than a fuel described in subparagraph (A), (C), or (E) of subsection (d)(2)) and taxable fuel (as defined in subparagraph (A), (B), or (C) of section 4083(a)(1)) which—

(A)

is sold by the taxpayer producing such mixture to any person for use as fuel, or

(B)

is used as a fuel by the taxpayer producing such mixture.

(3)

Termination

(f)

Mixture not used as a fuel, etc.

(1)

Imposition of tax

If—

(A)

any credit was determined under this section with respect to alcohol or biodiesel used in the production of any alcohol fuel mixture or biodiesel mixture, respectively, and

(B)

any person—

(i)

separates the alcohol or biodiesel from the mixture, or

(ii)

without separation, uses the mixture other than as a fuel,

then there is hereby imposed on such person a tax equal to the product of the applicable amount and the number of gallons of such alcohol or biodiesel.

(2)

Applicable laws

(g)

Coordination with exemption from excise tax

(h)

Denial of double benefit

(i)

Limitation to fuels with connection to the United States

(1)

Alcohol

(2)

Biodiesel and alternative fuels

For purposes of this subsection, the term “United States” includes any possession of the United States.

(j)

Energy equivalency determinations for liquefied petroleum gas and liquefied natural gas

For purposes of determining any credit under this section, any reference to the number of gallons of an alternative fuel or the gasoline gallon equivalent of such a fuel shall be treated as a reference to—

(1)

in the case of liquefied petroleum gas, the energy equivalent of a gallon of gasoline, as defined in section 4041(a)(2)(C), and

(2)

in the case of liquefied natural gas, the energy equivalent of a gallon of diesel, as defined in section 4041(a)(2)(D).

(k)

Sustainable aviation fuel credit

(1)

In general

For purposes of this section, the sustainable aviation fuel credit for the taxable year is, with respect to any sale or use of a qualified mixture, an amount equal to the product of—

(A)

the number of gallons of sustainable aviation fuel in such mixture, multiplied by

(B)

the sum of—

(i)

$1.25, plus

(ii)

the applicable supplementary amount with respect to such sustainable aviation fuel.

(2)

Definitions

(3)

Registration requirement

(Added Pub. L. 108–357, title III, § 301(a), Oct. 22, 2004, 118 Stat. 1459; amended Pub. L. 109–58, title XIII, § 1344(a), Aug. 8, 2005, 119 Stat. 1052; Pub. L. 109–59, title XI, §§ 11113(b)(1)–(3)(A), 11151(e)(2), Aug. 10, 2005, 119 Stat. 1947, 1948, 1969; Pub. L. 110–172, § 5(a)(2), (3), Dec. 29, 2007, 121 Stat. 2479; Pub. L. 110–234, title XV, §§ 15331(b), 15332(b), May 22, 2008, 122 Stat. 1516; Pub. L. 110–246, § 4(a), title XV, §§ 15331(b), 15332(b), June 18, 2008, 122 Stat. 1664, 2278; Pub. L. 110–343, div. B, title II, §§ 202(a), (b)(2), 203(c)(1), 204(a)(1), (2), (b), (c), Oct. 3, 2008, 122 Stat. 3832, 3834; Pub. L. 111–312, title VII, §§ 701(b)(1), 704(a), (b), 708(b)(1), Dec. 17, 2010, 124 Stat. 3310–3312; Pub. L. 112–240, title IV, §§ 405(b)(1), 412(a), Jan. 2, 2013, 126 Stat. 2340, 2343; Pub. L. 113–295, div. A, title I, § 160(a)(1), (b)(1), (c)(1), Dec. 19, 2014, 128 Stat. 4022; Pub. L. 114–113, div. Q, title I, §§ 185(b)(1), 192(a)(1), title III, § 342(a), Dec. 18, 2015, 129 Stat. 3073, 3075, 3114; Pub. L. 115–123, div. D, title I, §§ 40407(b)(1), 40415(a)(1), Feb. 9, 2018, 132 Stat. 149, 152; Pub. L. 115–141, div. U, title IV, § 401(a)(294), Mar. 23, 2018, 132 Stat. 1198; Pub. L. 116–94, div. Q, title I, §§ 121(b)(1)(A), 133(a)(1), (b)(1), Dec. 20, 2019, 133 Stat. 3230, 3233; Pub. L. 116–260, div. EE, title I, § 147(a), Dec. 27, 2020, 134 Stat. 3055; Pub. L. 117–169, title I, §§ 13201(b)(1), (c), (d), 13203(d)(1), (2)(A), 13204(d)(1), (2), Aug. 16, 2022, 136 Stat. 1931, 1932, 1934, 1935, 1941.)

cite as: 26 USC 6426

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