SB1869 is set to have a significant impact on state tax regulations concerning biofuels and their sale. By redefining how gasohol and majority blended ethanol fuels are taxed, it seeks to create fiscal incentives for blending ethanol with gasoline. Current tax structures that previously classified ethanol blends will be adjusted to reflect these changes, which proponents believe could spur economic benefits through renewable energy initiatives and stimulate the local biofuel industry.
SB1869, introduced by Senator Patrick J. Joyce, aims to amend several tax acts relating to the taxation of various ethanol blends, specifically establishing new definitions and tax rates for mid-range ethanol blends. The bill defines 'mid-range ethanol blend' as a blend of gasoline and denatured ethanol that contains at least 20% but less than 51% denatured ethanol. This legislation proposes that during the period from July 1, 2023, to December 31, 2030, the tax will be applied to 80% of the proceeds from the sale of such blends, with subsequent tax rates shifting to 100% of the proceeds thereafter.
While supporters argue that SB1869 will facilitate the growth of renewable fuel sources and enhance environmental efforts by making cleaner fuel options financially viable, critics are concerned about the potential for increased costs that could be passed onto consumers. Additionally, there are discussions regarding the implications of shifting tax burdens and how these changes will affect the overall fuel market prices, which raises questions about the balance between promoting biofuels and maintaining an affordable energy landscape.