Introduced Version
HOUSE BILL No. 1080
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 6-3.1; IC 6-6-2.5-1.5.
Synopsis: Biofuel tax credits. Provides tax credits for: (1) the sale of
higher ethanol blend; and (2) the: (A) sale of blended biodiesel; and
(B) blending of biodiesel. Provides that the amount of the higher
ethanol blend tax credit is $0.05 per gallon of higher ethanol blend sold
at the taxpayer's fueling station. Provides that the total amount of
higher ethanol blend tax credits that may be awarded for a state fiscal
year may not exceed $10,000,000. Provides that the amount of the
biodiesel tax credit is computed as follows: (1) $0.05 per gallon of
blended biodiesel of at least 5% but not more than 10%: (A) sold at the
taxpayer's fueling station; or (B) sold by a distributor directly to the
final user. (2) $0.10 per gallon of blended biodiesel that is more than
10% but not more than 20%: (A) sold at the taxpayer's fueling station;
or (B) sold by a distributor directly to the final user. (3) $0.18 per
gallon of blended biodiesel that is more than 20%: (A) sold at the
taxpayer's fueling station; or (B) sold by a distributor directly to the
final user. (4) For a person who blends biodiesel, the product of: (A)
$0.035; multiplied by (B) the number of gallons of blended biodiesel
that are produced by blending biodiesel at a terminal located in
Indiana. Provides that the biodiesel tax credit is refundable. Provides
that the total amount of biodiesel tax credits that may be awarded for
a state fiscal year may not exceed $5,000,000.
Effective: July 1, 2023.
Heine
January 9, 2023, read first time and referred to Committee on Ways and Means.
2023 IN 1080—LS 6331/DI 129 Introduced
First Regular Session of the 123rd General Assembly (2023)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2022 Regular Session of the General Assembly.
HOUSE BILL No. 1080
A BILL FOR AN ACT to amend the Indiana Code concerning
taxation.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 6-3.1-37 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2023]:
4 Chapter 37. Higher Ethanol Blend Tax Credit
5 Sec. 1. This chapter applies to taxable years beginning after
6 December 31, 2023.
7 Sec. 2. As used in this chapter, "fueling station" means a retail
8 location within Indiana from which higher ethanol blend is sold to
9 the public and is dispensed directly into the fuel tank of a
10 customer's motor vehicle.
11 Sec. 3. As used in this chapter, "higher ethanol blend" means an
12 ethanol blend that is at least fifteen percent (15%) but not more
13 than eighty-five percent (85%) ethanol and is dispensed directly
14 into the fuel tank of a motor vehicle.
15 Sec. 4. As used in this chapter, "metered pump" means a
16 stationary pump that is capable of metering the amount of
17 gasoline, special fuel, or higher ethanol blend dispensed from it and
2023 IN 1080—LS 6331/DI 129 2
1 that is capable of simultaneously calculating and displaying the
2 price of the gasoline, special fuel, or higher ethanol blend
3 dispensed.
4 Sec. 5. As used in this chapter, "state tax liability" means a
5 taxpayer's total tax liability that is incurred under IC 6-3-1
6 through IC 6-3-7 (the adjusted gross income tax) as computed after
7 the application of the credits that, under IC 6-3.1-1-2, are to be
8 applied before the credit provided by this chapter.
9 Sec. 6. As used in this chapter, "taxpayer" means any person,
10 corporation, limited liability company, partnership, or other entity
11 that:
12 (1) owns a fueling station;
13 (2) sells higher ethanol blend at the fueling station; and
14 (3) has state tax liability.
15 Sec. 7. A taxpayer is entitled to a credit against the taxpayer's
16 state tax liability for higher ethanol blend sold at the taxpayer's
17 fueling station during a particular taxable year. The amount of the
18 credit provided by this chapter equals five cents ($0.05) per gallon
19 of higher ethanol blend that the retail dealer sells and dispenses
20 through a metered pump at the taxpayer's fueling station during
21 the taxable year.
22 Sec. 8. (a) The credit must be used for the taxable year in which
23 the credit accrued. However, if the amount of the credit
24 determined under this chapter for a taxpayer's taxable year
25 exceeds the taxpayer's state tax liability for that taxable year, the
26 taxpayer may carry over the excess to the following taxable years.
27 The amount of the credit carryover from a taxable year must be
28 reduced to the extent that the carryover is used by the taxpayer to
29 obtain a credit under this chapter for any subsequent year. A
30 credit may not be carried forward for more than three (3) taxable
31 years following the taxable year in which the taxpayer is first
32 entitled to claim the credit.
33 (b) A taxpayer is not entitled to a carryback or refund of any
34 unused credit.
35 (c) A taxpayer may not sell, assign, convey, or otherwise
36 transfer the credit provided by this chapter.
37 Sec. 9. If a pass through entity that qualifies for the credit does
38 not have state tax liability against which the credit may be applied,
39 a shareholder, partner, or member of the pass through entity may
40 claim a credit under this chapter equal to:
41 (1) the credit determined for the pass through entity under
42 this chapter for the taxable year; multiplied by
2023 IN 1080—LS 6331/DI 129 3
1 (2) the percentage of the pass through entity's distributive
2 income to which the shareholder, partner, or member is
3 entitled.
4 Sec. 10. The total amount of tax credits that may be awarded
5 under this chapter for a state fiscal year may not exceed ten million
6 dollars ($10,000,000).
7 Sec. 11. This chapter expires January 1, 2030.
8 SECTION 2. IC 6-3.1-38 IS ADDED TO THE INDIANA CODE
9 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
10 JULY 1, 2023]:
11 Chapter 38. Biodiesel Tax Credit
12 Sec. 1. This chapter applies to taxable years beginning after
13 December 31, 2023.
14 Sec. 2. As used in this chapter, "biodiesel" has the meaning set
15 forth in IC 6-6-2.5-1.5(a).
16 Sec. 3. As used in this chapter, "blender" means a person,
17 corporation, limited liability company, partnership, or other entity
18 that blends biodiesel at a terminal located in Indiana.
19 Sec. 4. As used in this chapter, "blended biodiesel" has the
20 meaning set forth in IC 6-6-2.5-1.5(b).
21 Sec. 5. As used in this chapter, "distributor" means a person,
22 corporation, limited liability company, partnership, or other entity
23 in Indiana that:
24 (1) produces, refines, blends, compounds, or manufactures
25 motor fuel;
26 (2) imports motor fuel; or
27 (3) is engaged in distribution of motor fuel.
28 Sec. 6. As used in this chapter, "fueling station" means a retail
29 location within Indiana from which blended biodiesel is sold to the
30 public and is dispensed directly into the fuel tank of a customer's
31 motor vehicle.
32 Sec. 7. As used in this chapter, "metered pump" means a
33 stationary pump that is capable of metering the amount of
34 gasoline, special fuel, or blended biodiesel dispensed from it and
35 that is capable of simultaneously calculating and displaying the
36 price of the gasoline, special fuel, or blended biodiesel dispensed.
37 Sec. 8. As used in this chapter, "retail dealer" means a person,
38 corporation, limited liability company, partnership, or other entity
39 that owns or operates a fueling station.
40 Sec. 9. As used in this chapter, "state tax liability" means a
41 taxpayer's total tax liability that is incurred under IC 6-3-1
42 through IC 6-3-7 (the adjusted gross income tax) as computed after
2023 IN 1080—LS 6331/DI 129 4
1 the application of the credits that, under IC 6-3.1-1-2, are to be
2 applied before the credit provided by this chapter.
3 Sec. 10. As used in this chapter, "taxpayer" means a:
4 (1) retail dealer;
5 (2) distributor; or
6 (3) blender;
7 that has state tax liability.
8 Sec. 11. As used in this chapter, "terminal" has the meaning set
9 forth in IC 6-6-2.5-24.
10 Sec. 12. (a) A taxpayer is entitled to a credit against the
11 taxpayer's state tax liability for a taxable year if any of the
12 following apply:
13 (1) The taxpayer is a retail dealer that sells blended biodiesel
14 at a fueling station.
15 (2) The taxpayer is a distributor that sells blended biodiesel
16 directly to the final user located in Indiana.
17 (3) Subject to the limitation set forth in subsection (c), the
18 taxpayer is a blender that blends biodiesel at a terminal
19 located in Indiana.
20 (b) This subsection applies to the calculation of the amount of
21 the credit for a retail dealer or distributor. The amount of the
22 credit is equal to the following:
23 (1) Five cents ($0.05) per gallon of blended biodiesel of at least
24 five percent (5%) but not more than ten percent (10%) sold
25 by a:
26 (A) retail dealer through a metered pump at the retail
27 dealer's fueling station; or
28 (B) distributor directly to the final user located in Indiana;
29 during the taxable year for which the credit is claimed.
30 (2) Ten cents ($0.10) per gallon of blended biodiesel that is
31 more than ten percent (10%) but not more than twenty
32 percent (20%) sold by a:
33 (A) retail dealer through a metered pump at the retail
34 dealer's fueling station; or
35 (B) distributor directly to the final user located in Indiana;
36 during the taxable year for which the credit is claimed.
37 (3) Eighteen cents ($0.18) per gallon of blended biodiesel that
38 is more than twenty percent (20%) sold by a:
39 (A) retail dealer through a metered pump at the retail
40 dealer's fueling station; or
41 (B) distributor directly to the final user located in Indiana;
42 during the taxable year for which the credit is claimed.
2023 IN 1080—LS 6331/DI 129 5
1 (c) This subsection applies to the calculation of the amount of
2 the credit for a blender. The amount of the credit is equal to the
3 product of:
4 (1) three and one-half cents ($0.035); multiplied by
5 (2) the number of gallons of blended biodiesel that are
6 produced by blending biodiesel at a terminal located in
7 Indiana;
8 during the taxable year for which the credit is claimed. However,
9 the amount of the credit allowed under this subsection shall be
10 reduced by any subsidy that the taxpayer is entitled to receive from
11 the federal government for the taxpayer's production of blended
12 biodiesel.
13 (d) The credit must be used for the taxable year in which the
14 credit accrued.
15 Sec. 13. A taxpayer is not entitled to carryback any unused
16 credit.
17 Sec. 14. A taxpayer may not sell, assign, convey, or otherwise
18 transfer the credit provided by this chapter.
19 Sec. 15. If a pass through entity that qualifies for the credit does
20 not have state tax liability against which the credit may be applied,
21 a shareholder, partner, or member of the pass through entity may
22 claim a credit under this chapter equal to:
23 (1) the credit determined for the pass through entity under
24 this chapter for the taxable year; multiplied by
25 (2) the percentage of the pass through entity's distributive
26 income to which the shareholder, partner, or member is
27 entitled.
28 Sec. 16. If the amount of the tax credit exceeds the taxpayer's
29 state tax liability, the taxpayer is entitled to a refundable credit,
30 and the excess shall be refunded to the taxpayer.
31 Sec. 17. The total amount of tax credits that may be awarded
32 under this chapter for a state fiscal year may not exceed five
33 million dollars ($5,000,000). However, if the total amount of tax
34 credits exceeds the amount of available credits permitted by this
35 section, the credits shall be apportioned among taxpayers who
36 claim a credit before the taxpayer's due date for filing a return for
37 the taxable year.
38 Sec. 18. (a) To receive the credit provided by this chapter, a
39 taxpayer must claim the credit on the taxpayer's annual state tax
40 return in the manner prescribed by the department. The taxpayer
41 shall submit to the department all information that the department
42 determines is necessary for the calculation of the credit.
2023 IN 1080—LS 6331/DI 129 6
1 (b) The department may consult with the Indiana department
2 of health to validate that any blended biodiesel for which a
3 taxpayer claims a credit under this chapter contains a sufficient
4 percentage of biodiesel fuel.
5 Sec. 19. The department shall adopt rules under IC 4-22-2 to
6 implement this chapter.
7 Sec. 20. This chapter expires January 1, 2030.
8 SECTION 3. IC 6-6-2.5-1.5, AS ADDED BY P.L.122-2006,
9 SECTION 20, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
10 JULY 1, 2023]: Sec. 1.5. (a) As used in this chapter, "biodiesel" means
11 a renewable, biodegradable, mono alkyl ester combustible liquid fuel
12 derived from agricultural plant oils or animal fats that meets American
13 Society for Testing and Materials specifications D6751-03a Standard
14 Specification for Biodiesel Fuel (B100) Blend Stock for Distillate
15 Fuels, as well as other fuels of the same derivation capable of use in the
16 generation of power for the propulsion of a motor vehicle, airplane, or
17 motorboat.
18 (b) As used in this chapter, "blended biodiesel" means a blend of
19 biodiesel with petroleum diesel fuel so that the volume percentage of
20 biodiesel in the blend is at least two percent (2%). A biodiesel blend
21 may be described as "Bxx" where "xx" represents the volume
22 percentage of biodiesel fuel. "B2" is the type of biodiesel blend with
23 the least volume percentage of biodiesel fuel, and "B99" is the type of
24 biodiesel fuel with the most volume percentage of biodiesel fuel. The
25 term does not include biodiesel (B100).
26 (c) As used in this chapter, "B99" means a blend of ninety-nine
27 percent (99%) biodiesel fuel that meets the most recent version of
28 the American Society for Testing and Materials International
29 D6751 Standard Specification for Biodiesel Fuel Blend Stock with
30 a minimum of one-tenth of one percent (0.1%) and maximum of
31 one percent (1%) diesel fuel that meets the most recent version of
32 the American Society for Testing and Materials International D975
33 Standard Specification for Diesel Fuel.
2023 IN 1080—LS 6331/DI 129