*SB0254.1*
February 5, 2025
SENATE BILL No. 254
_____
DIGEST OF SB 254 (Updated February 4, 2025 12:38 pm - DI 129)
Citations Affected: IC 6-3.1; IC 6-6.
Synopsis: Biofuel tax credits. Provides tax credits for: (1) the sale of
higher ethanol blend; and (2) the: (A) sale of blended biodiesel or
renewable diesel; and (B) blending of biodiesel or renewable diesel.
Specifies the amount of the tax credit for higher ethanol blend. Limits
the total amount of higher ethanol blend tax credits that may be
awarded in a state fiscal year to $10,000. Specifies the amount of the
tax credit for blended biodiesel or renewable diesel. Limits the total
amount of blended biodiesel or renewable diesel tax credits that may
be awarded in a state fiscal year to $10,000.
Effective: July 1, 2025.
Buchanan
January 13, 2025, read first time and referred to Committee on Tax and Fiscal Policy.
February 4, 2025, amended, reported favorably — Do Pass.
SB 254—LS 6746/DI 129 February 5, 2025
First Regular Session of the 124th General Assembly (2025)
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 2024 Regular Session of the General Assembly.
SENATE BILL No. 254
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 6-3.1-41.1 IS ADDED TO THE INDIANA CODE
2 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2025]:
4 Chapter 41.1. Higher Ethanol Blend Tax Credit
5 Sec. 1. This chapter applies to taxable years beginning after
6 December 31, 2025.
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
SB 254—LS 6746/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. Subject to section 12 of this chapter, a taxpayer may
16 claim a credit against the taxpayer's state tax liability for higher
17 ethanol blend sold at the taxpayer's fueling station during a
18 particular taxable year. The amount of the credit provided by this
19 chapter equals five cents ($0.05) per gallon of higher ethanol blend
20 that the retail dealer sells and dispenses through a metered pump
21 at the taxpayer's fueling station during the taxable year.
22 Sec. 8. (a) A taxpayer is not entitled to a carryback, carryover,
23 or refund of any unused credit.
24 (b) A taxpayer may not sell, assign, convey, or otherwise
25 transfer the credit provided by this chapter.
26 Sec. 9. If a pass through entity that qualifies for the credit does
27 not have state tax liability against which the credit may be applied,
28 a shareholder, partner, or member of the pass through entity may
29 claim a credit under this chapter equal to:
30 (1) the credit determined for the pass through entity under
31 this chapter for the taxable year; multiplied by
32 (2) the percentage of the pass through entity's distributive
33 income to which the shareholder, partner, or member is
34 entitled.
35 Sec. 10. To receive the credit provided by this chapter, a
36 taxpayer must claim the credit on the taxpayer's annual state tax
37 return in the manner prescribed by the department. The taxpayer
38 shall submit to the department all information that the department
39 determines is necessary for the calculation of the credit.
40 Sec. 11. The department, on a website used by the department
41 to provide information to the public, shall provide the following
42 information:
SB 254—LS 6746/DI 129 3
1 (1) The application for the credit provided by this chapter.
2 (2) A timeline for receiving the credit provided by this
3 chapter.
4 (3) The total amount of credits awarded under this chapter
5 during the current state fiscal year.
6 Sec. 12. (a) The total amount of tax credits that may be awarded
7 under this chapter for each state fiscal year may not exceed ten
8 thousand dollars ($10,000).
9 (b) The department shall record the time of filing of each
10 application for the department's approval of a credit and shall
11 approve granting the credit to the taxpayer, if the taxpayer
12 otherwise qualifies for a credit under this chapter, in the
13 chronological order in which the application for the department's
14 approval is filed in the year.
15 (c) When the total credits approved under this section equal the
16 maximum amount allowable under this section, the department
17 may not thereafter approve an application for the credit.
18 Sec. 13. This chapter expires December 31, 2027.
19 SECTION 2. IC 6-3.1-41.3 IS ADDED TO THE INDIANA CODE
20 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
21 JULY 1, 2025]:
22 Chapter 41.3. Biodiesel Tax Credit
23 Sec. 1. This chapter applies to taxable years beginning after
24 December 31, 2025.
25 Sec. 2. As used in this chapter, "biodiesel" has the meaning set
26 forth in IC 6-6-2.5-1.5(a).
27 Sec. 3. As used in this chapter, "blended biodiesel" has the
28 meaning set forth in IC 6-6-2.5-1.5(b).
29 Sec. 4. As used in this chapter, "blender" means a person,
30 corporation, limited liability company, partnership, or other entity
31 that:
32 (1) produces, refines, compounds, or manufactures motor
33 fuel; or
34 (2) blends biodiesel or renewable diesel;
35 at a terminal located in Indiana.
36 Sec. 5. As used in this chapter, "distributor" means a person,
37 corporation, limited liability company, partnership, or other entity
38 in Indiana that:
39 (1) imports motor fuel; or
40 (2) is engaged in distribution of motor fuel.
41 Sec. 6. As used in this chapter, "fueling station" means a retail
42 location within Indiana from which blended biodiesel or renewable
SB 254—LS 6746/DI 129 4
1 diesel is sold to the public and is dispensed directly into the fuel
2 tank of a customer's motor vehicle.
3 Sec. 7. As used in this chapter, "metered pump" means a
4 stationary pump that is capable of:
5 (1) metering the amount of gasoline, special fuel, blended
6 biodiesel, or renewable diesel dispensed from it; and
7 (2) simultaneously calculating and displaying the price of the
8 gasoline, special fuel, blended biodiesel, or renewable diesel
9 dispensed.
10 Sec. 8. As used in this chapter, "renewable diesel" means
11 hydrocarbon fuel derived from biomass meeting the requirements
12 of the most recent version of the American Society for Testing and
13 Materials standard D975 or D396. A fuel that has been coprocessed
14 or blended is not considered renewable diesel unless the biomass
15 derived portion of the coprocessed renewable diesel can be verified
16 using the most recent version of the American Society for Testing
17 and Materials standard D6866.
18 Sec. 9. As used in this chapter, "retail dealer" means a person,
19 corporation, limited liability company, partnership, or other entity
20 that owns or operates a fueling station.
21 Sec. 10. As used in this chapter, "state tax liability" means a
22 taxpayer's total tax liability that is incurred under IC 6-3-1
23 through IC 6-3-7 (the adjusted gross income tax) as computed after
24 the application of the credits that, under IC 6-3.1-1-2, are to be
25 applied before the credit provided by this chapter.
26 Sec. 11. As used in this chapter, "taxpayer" means a:
27 (1) retail dealer;
28 (2) distributor; or
29 (3) blender;
30 that has state tax liability.
31 Sec. 12. As used in this chapter, "terminal" has the meaning set
32 forth in IC 6-6-2.5-24.
33 Sec. 13. (a) Subject to section 18 of this chapter, a taxpayer may
34 claim a credit against the taxpayer's state tax liability for a taxable
35 year if any of the following apply:
36 (1) The taxpayer is a retail dealer that sells blended biodiesel
37 or renewable diesel at a fueling station.
38 (2) The taxpayer is a distributor that sells blended biodiesel or
39 renewable diesel directly to the final user located in Indiana.
40 (3) The taxpayer is a blender that blends biodiesel or
41 renewable diesel at a terminal located in Indiana.
42 (b) This subsection applies to the calculation of the amount of
SB 254—LS 6746/DI 129 5
1 the credit for a retail dealer or distributor. The amount of the
2 credit is equal to the following:
3 (1) Five cents ($0.05) per gallon of blended biodiesel or
4 renewable diesel of at least five percent (5%) but not more
5 than ten percent (10%) sold by a:
6 (A) retail dealer through a metered pump at the retail
7 dealer's fueling station; or
8 (B) distributor directly to the final user located in Indiana;
9 during the taxable year for which the credit is claimed.
10 (2) Ten cents ($0.10) per gallon of blended biodiesel or
11 renewable diesel that is more than ten percent (10%) but not
12 more than twenty percent (20%) sold by a:
13 (A) retail dealer through a metered pump at the retail
14 dealer's fueling station; or
15 (B) distributor directly to the final user located in Indiana;
16 during the taxable year for which the credit is claimed.
17 (3) Eighteen cents ($0.18) per gallon of blended biodiesel or
18 renewable diesel that is more than twenty percent (20%) sold
19 by a:
20 (A) retail dealer through a metered pump at the retail
21 dealer's fueling station; or
22 (B) distributor directly to the final user located in Indiana;
23 during the taxable year for which the credit is claimed.
24 (c) This subsection applies to the calculation of the amount of
25 the credit for a blender. The amount of the credit is equal to the
26 product of:
27 (1) three and one-half cents ($0.035); multiplied by
28 (2) the number of gallons of blended biodiesel or renewable
29 diesel that is:
30 (A) more than five percent (5%); and
31 (B) produced by blending biodiesel or renewable diesel at
32 a terminal located in Indiana;
33 during the taxable year for which the credit is claimed.
34 (d) The credit must be used for the taxable year in which the
35 credit accrued.
36 Sec. 14. A taxpayer is not entitled to a carryback, carryover, or
37 refund of any unused credit.
38 Sec. 15. A taxpayer may not sell, assign, convey, or otherwise
39 transfer the credit provided by this chapter.
40 Sec. 16. If a pass through entity that qualifies for the credit does
41 not have state tax liability against which the credit may be applied,
42 a shareholder, partner, or member of the pass through entity may
SB 254—LS 6746/DI 129 6
1 claim a credit under this chapter equal to:
2 (1) the credit determined for the pass through entity under
3 this chapter for the taxable year; multiplied by
4 (2) the percentage of the pass through entity's distributive
5 income to which the shareholder, partner, or member is
6 entitled.
7 Sec. 17. The department, on a website used by the department
8 to provide information to the public, shall provide the following
9 information:
10 (1) The application for the credit provided by this chapter.
11 (2) A timeline for receiving the credit provided by this
12 chapter.
13 (3) The total amount of credits awarded under this chapter
14 during the current state fiscal year.
15 Sec. 18. (a) The total amount of tax credits that may be awarded
16 under this chapter for each state fiscal year may not exceed ten
17 thousand dollars ($10,000).
18 (b) The department shall record the time of filing of each
19 application for the department's approval of a credit and shall
20 approve granting the credit to the taxpayer, if the taxpayer
21 otherwise qualifies for a credit under this chapter, in the
22 chronological order in which the application for the department's
23 approval is filed in the year.
24 (c) When the total credits approved under this section equal the
25 maximum amount allowable under this section, the department
26 may not thereafter approve an application for the credit.
27 Sec. 19. (a) To receive the credit provided by this chapter, a
28 taxpayer must claim the credit on the taxpayer's annual state tax
29 return in the manner prescribed by the department. The taxpayer
30 shall submit to the department all information that the department
31 determines is necessary for the calculation of the credit.
32 (b) The department may consult with the Indiana department
33 of health to validate that any blended biodiesel or renewable diesel
34 for which a taxpayer claims a credit under this chapter contains a
35 sufficient percentage of biodiesel or renewable diesel fuel.
36 Sec. 20. This chapter expires December 31, 2027.
37 SECTION 3. IC 6-6-2.5-1.5, AS ADDED BY P.L.122-2006,
38 SECTION 20, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
39 JULY 1, 2025]: Sec. 1.5. (a) As used in this chapter, "biodiesel" means
40 a renewable, biodegradable, mono alkyl ester combustible liquid fuel
41 derived from agricultural plant oils or animal fats that meets the most
42 recent American Society for Testing and Materials specifications
SB 254—LS 6746/DI 129 7
1 D6751-03a D6751 Standard Specification for Biodiesel Fuel (B100)
2 Blend Stock for Distillate Fuels, as well as other fuels of the same
3 derivation capable of use in the generation of power for the propulsion
4 of a motor vehicle, airplane, or motorboat.
5 (b) As used in this chapter, "blended biodiesel" means a blend of
6 biodiesel with petroleum diesel fuel so that the volume percentage of
7 biodiesel in the blend is at least two percent (2%). A biodiesel blend
8 may be described as "Bxx" where "xx" represents the volume
9 percentage of biodiesel fuel. "B2" is the type of biodiesel blend with
10 the least volume percentage of biodiesel fuel, and "B99" is the type of
11 biodiesel fuel with the most volume percentage of biodiesel fuel. The
12 term does not include biodiesel (B100).
13 (c) As used in this chapter, "B99" means a blend of ninety-nine
14 percent (99%) biodiesel fuel that meets the most recent version of
15 the American Society for Testing and Materials International
16 D6751 Standard Specification for Biodiesel Fuel Blend Stock with
17 a minimum of one-tenth of one percent (0.1%) and maximum of
18 one percent (1%) diesel fuel that meets the most recent version of
19 the American Society for Testing and Materials International D975
20 or D7467 Standard Specification for Diesel Fuel.
SB 254—LS 6746/DI 129 8
COMMITTEE REPORT
Mr. President: The Senate Committee on Tax and Fiscal Policy, to
which was referred Senate Bill No. 254, has had the same under
consideration and begs leave to report the same back to the Senate with
the recommendation that said bill be AMENDED as follows:
Page 2, line 15, delete "A taxpayer is entitled to" and insert "Subject
to section 12 of this chapter, a taxpayer may claim".
Page 2, delete lines 22 through 36, begin a new paragraph and
insert:
"Sec. 8. (a) A taxpayer is not entitled to a carryback, carryover,
or refund of any unused credit.
(b) A taxpayer may not sell, assign, convey, or otherwise
transfer the credit provided by this chapter.".
Page 3, delete lines 4 through 7, begin a new paragraph and insert:
"Sec. 10. To receive the credit provided by this chapter, a
taxpayer must claim the credit on the taxpayer's annual state tax
return in the manner prescribed by the department. The taxpayer
shall submit to the department all information that the department
determines is necessary for the calculation of the credit.
Sec. 11. The department, on a website used by the department
to provide information to the public, shall provide the following
information:
(1) The application for the credit provided by this chapter.
(2) A timeline for receiving the credit provided by this
chapter.
(3) The total amount of credits awarded under this chapter
during the current state fiscal year.
Sec. 12. (a) The total amount of tax credits that may be awarded
under this chapter for each state fiscal year may not exceed ten
thousand dollars ($10,000).
(b) The department shall record the time of filing of each
application for the department's approval of a credit and shall
approve granting the credit to the taxpayer, if the taxpayer
otherwise qualifies for a credit under this chapter, in the
chronological order in which the application for the department's
approval is filed in the year.
(c) When the total credits approved under this section equal the
maximum amount allowable under this section, the department
may not thereafter approve an application for the credit.
Sec. 13. This chapter expires December 31, 2027.".
Page 4, delete lines 22 through 24, begin a new paragraph and
insert:
SB 254—LS 6746/DI 129 9
"Sec. 13. (a) Subject to section 18 of this chapter, a taxpayer
may claim a credit against the taxpayer's state tax liability for a
taxable year if any of the following apply:".
Page 5, line 25, delete "to carryback" and insert "to a carryback,
carryover, or refund of".
Page 5, delete lines 38 through 42, begin a new paragraph and
insert:
"Sec. 17. The department, on a website used by the department
to provide information to the public, shall provide the following
information:
(1) The application for the credit provided by this chapter.
(2) A timeline for receiving the credit provided by this
chapter.
(3) The total amount of credits awarded under this chapter
during the current state fiscal year.
Sec. 18. (a) The total amount of tax credits that may be awarded
under this chapter for each state fiscal year may not exceed ten
thousand dollars ($10,000).
(b) The department shall record the time of filing of each
application for the department's approval of a credit and shall
approve granting the credit to the taxpayer, if the taxpayer
otherwise qualifies for a credit under this chapter, in the
chronological order in which the application for the department's
approval is filed in the year.
(c) When the total credits approved under this section equal the
maximum amount allowable under this section, the department
may not thereafter approve an application for the credit.".
Page 6, delete lines 1 through 5.
Page 6, line 15, delete "January 1, 2032." and insert "December 31,
2027.".
and when so amended that said bill do pass.
(Reference is to SB 254 as introduced.)
HOLDMAN, Chairperson
Committee Vote: Yeas 11, Nays 1.
SB 254—LS 6746/DI 129