Amended 2005
- 2005 Pub. L. 109-59 Pub. L. 109–59, § 11113(b)(3)(A), substituted “alcohol fuel, biodiesel, and alternative fuel” for “alcohol fuel and biodiesel” in section catchline.
Cases: Delek US Holdings, Inc. v. United States, 32 F.4th 495 (6th Cir. 2022); Sunoco, Inc. v. United States, 908 F.3d 710 (Fed. Cir. 2018); Vitol v. United States, 30 F.4th 248 (5th Cir. 2022)
(a) Allowance of credits There shall be allowed as a credit—
Amended 2005
- 2005 Pub. L. 109-59 Pub. L. 109–59, § 11113(b)(1), reenacted heading without change and amended text of subsec. (a) generally. Prior to amendment, text read as follows: “There shall be allowed as a credit against the tax imposed by section 4081 an amount equal to the sum of—
“(1) the alcohol fuel mixture credit, plus
“(2) the biodiesel mixture credit.”
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(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
Amended 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13203(d)(2)(A)(i), substituted “(e), and (k)” for “and (e)”.
(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
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(1) In general For purposes of this section, the alcohol fuel mixture credit is the product of the applicable amount and the number of gallons of alcohol used by the taxpayer in producing any alcohol fuel mixture for sale or use in a trade or business of the taxpayer.
(2) Applicable amount For purposes of this subsection—
(A) In general Except as provided in subparagraphs (B) and (C), the applicable amount is—
Amended 2008
- 2008 Pub. L. 110-246 Pub. L. 110–246, § 15331(b)(3), substituted “subparagraphs (B) and (C)” for “subparagraph (B)” in introductory provisions.
- 2008 Pub. L. 110-246 Pub. L. 110–246, § 15331(b)(1), substituted “the applicable amount is—” for “the applicable amount is 51 cents” and added cls. (i) and (ii).
(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.
Amended 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141 substituted “cents.” for “cents..”
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(B) Mixtures not containing ethanol In the case of an alcohol fuel mixture in which none of the alcohol consists of ethanol, the applicable amount is 60 cents.
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(C) Reduction delayed until annual production or importation of 7,500,000,000 gallons In the case of any calendar year beginning after 2008, if the Secretary makes a determination described in section 40(h)(3)(B) with respect to all preceding calendar years beginning after 2007, subparagraph (A)(ii) shall be applied by substituting “51 cents” for “45 cents”.
Amended 2008
- 2008 Pub. L. 110-246 Pub. L. 110–246, § 15331(b)(2), added subpar. (C).
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(3) Alcohol fuel mixture For purposes of this subsection, the term “alcohol fuel mixture” means a mixture of alcohol and a taxable fuel which—
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(A) is sold by the taxpayer producing such mixture to any person for use as a fuel, or
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(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—
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Such term also includes an alcohol gallon equivalent of ethyl tertiary butyl ether or other ethers produced from such alcohol.
(B) Taxable fuel The term “taxable fuel” has the meaning given such term by section 4083(a)(1).
(5) Volume of alcohol For purposes of determining under subsection (a) the number of gallons of alcohol with respect to which a credit is allowable under subsection (a), the volume of alcohol shall include the volume of any denaturant (including gasoline) which is added under any formulas approved by the Secretary to the extent that such denaturants do not exceed 2 percent of the volume of such alcohol (including denaturants).
Amended 2008
- 2008 Pub. L. 110-246 Pub. L. 110–246, § 15332(b), added par. (5) and redesignated former par. (5) as (6).
(6) Termination This subsection shall not apply to any sale, use, or removal for any period after December 31, 2011.
Amended 2008, 2010
- 2010 Pub. L. 111-312 Pub. L. 111–312, § 708(b)(1), substituted “December 31, 2011” for “December 31, 2010”.
- 2008 Pub. L. 110-246 Pub. L. 110–246, § 15332(b), added par. (5) and redesignated former par. (5) as (6).
(c) Biodiesel mixture credit
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(1) In general For purposes of this section, the biodiesel mixture credit is the product of the applicable amount and the number of gallons of biodiesel used by the taxpayer in producing any biodiesel mixture for sale or use in a trade or business of the taxpayer.
(2) Applicable amount For purposes of this subsection, the applicable amount is $1.00.
Amended 2008
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 202(b)(2), amended par. (2) generally. Prior to amendment, text read as follows: “For purposes of this subsection—
“(A) In general.—Except as provided in subparagraph (B), the applicable amount is 50 cents.
“(B) Amount for agri-biodiesel.—In the case of any biodiesel which is agri-biodiesel, the applicable amount is $1.00.”
(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—
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(4) Certification for biodiesel No credit shall be allowed under this subsection unless the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer of the biodiesel which identifies the product produced and the percentage of biodiesel and agri-biodiesel in the product.
(5) Other definitions Any term used in this subsection which is also used in section 40A shall have the meaning given such term by section 40A.
(6) Termination This subsection shall not apply to any sale, use, or removal for any period after December 31, 2024.
Amended 2005, 2008, 2010, 2013, 2014, 2015, 2018, 2019, 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13201(b)(1), substituted “December 31, 2024” for “December 31, 2022”.
- 2019 Pub. L. 116-94 Pub. L. 116–94, § 121(b)(1)(A), substituted “December 31, 2022” for “December 31, 2017”.
- 2018 Pub. L. 115-123 Pub. L. 115–123, § 40407(b)(1), substituted “December 31, 2017” for “December 31, 2016”.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 185(b)(1), substituted “December 31, 2016” for “December 31, 2014”.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 160(a)(1), substituted “December 31, 2014” for “December 31, 2013”.
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 405(b)(1), substituted “December 31, 2013” for “December 31, 2011”.
- 2010 Pub. L. 111-312 Pub. L. 111–312, § 701(b)(1), substituted “December 31, 2011” for “December 31, 2009”.
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 202(a), substituted “December 31, 2009” for “December 31, 2008”.
- 2005 Pub. L. 109-58 Pub. L. 109–58 substituted “2008” for “2006”.
(d) Alternative fuel credit
Amended 2005
- 2005 Pub. L. 109-59 Pub. L. 109–59, § 11113(b)(2), added subsec. (d). Former subsec. (d) redesignated (f).
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(1) In general For purposes of this section, the alternative fuel credit is the product of 50 cents and the number of gallons of an alternative fuel or gasoline gallon equivalents of a nonliquid alternative fuel sold by the taxpayer for use as a fuel in a motor vehicle or motorboat, sold by the taxpayer for use as a fuel in aviation, or so used by the taxpayer.
Amended 2008
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 204(b)(2), inserted “sold by the taxpayer for use as a fuel in aviation,” after “motorboat,”.
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(2) Alternative fuel For purposes of this section, the term “alternative fuel” means—
Amended 2008, 2010, 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13204(d)(1), redesignated subpars. (E) to (G) as (D) to (F), respectively, and struck out former subpar. (D) which read as follows: “liquefied hydrogen,”.
- 2010 Pub. L. 111-312 Pub. L. 111–312, § 704(b), substituted “biodiesel, or any fuel (including lignin, wood residues, or spent pulping liquors) derived from the production of paper or pulp” for “or biodiesel” in concluding provisions.
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 204(b)(1), added subpar. (F) and redesignated former subpar. (F) as (G).
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(A) liquefied petroleum gas,
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(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,
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(D) any liquid fuel which meets the requirements of paragraph (4) and which is derived from coal (including peat) through the Fischer-Tropsch process,
Amended 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13204(d)(1), redesignated subpars. (E) to (G) as (D) to (F), respectively, and struck out former subpar. (D) which read as follows: “liquefied hydrogen,”.
(E) compressed or liquefied gas derived from biomass (as defined in section 45K(c)(3)), and
Amended 2008, 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13204(d)(1), redesignated subpars. (E) to (G) as (D) to (F), respectively, and struck out former subpar. (D) which read as follows: “liquefied hydrogen,”.
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 204(c)(2), inserted “which meets the requirements of paragraph (4) and which is” after “any liquid fuel”.
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(F) liquid fuel derived from biomass (as defined in section 45K(c)(3)).
Amended 2005, 2007, 2008, 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13204(d)(1), redesignated subpars. (E) to (G) as (D) to (F), respectively, and struck out former subpar. (D) which read as follows: “liquefied hydrogen,”.
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 204(b)(1), added subpar. (F) and redesignated former subpar. (F) as (G).
- 2007 Pub. L. 110-172 Pub. L. 110–172, § 5(a)(2), substituted “fuel” for “hydrocarbons”.
- 2005 Pub. L. 109-59 Pub. L. 109–59, § 11151(e)(2), substituted “section 45K(c)(3)” for “section 29(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 For purposes of this subsection, the term “gasoline gallon equivalent” means, with respect to any nonliquid alternative fuel, the amount of such fuel having a Btu content of 124,800 (higher heating value).
(4) Carbon capture requirement
Amended 2008
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 204(c)(1), added par. (4). Former par. (4) redesignated (5).
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 204(a)(1), substituted “December 31, 2009” for “September 30, 2009”.
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(A) In general The requirements of this paragraph are met if the fuel is certified, under such procedures as required by the Secretary, as having been derived from coal produced at a gasification facility which separates and sequesters not less than the applicable percentage of such facility’s total carbon dioxide emissions.
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(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 This subsection shall not apply to any sale or use for any period after December 31, 2024.
Amended 2008, 2010, 2013, 2014, 2015, 2018, 2019, 2020, 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13201(c), substituted “December 31, 2024” for “December 31, 2021”.
- 2020 Pub. L. 116-260 Pub. L. 116–260 substituted “December 31, 2021” for “December 31, 2020”.
- 2019 Pub. L. 116-94 Pub. L. 116–94, § 133(a)(1), substituted “December 31, 2020” for “December 31, 2017”.
- 2018 Pub. L. 115-123 Pub. L. 115–123, § 40415(a)(1), substituted “December 31, 2017” for “December 31, 2016”.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 192(a)(1), substituted “December 31, 2016” for “December 31, 2014”.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 160(c)(1), which directed striking out “(September 30, 2014 in the case of any sale or use involving liquefied hydrogen)”, was executed by striking out “(September 30, 2014, in the case of any sale or use involving liquefied hydrogen)” before period at end, to reflect the probable intent of Congress.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 160(b)(1), substituted “December 31, 2014” for “December 31, 2013”.
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 412(a), substituted “December 31, 2013” for “December 31, 2011”.
- 2010 Pub. L. 111-312 Pub. L. 111–312, § 704(a), substituted “December 31, 2011” for “December 31, 2009”.
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 204(c)(1), redesignated par. (4) as (5).
(e) Alternative fuel mixture credit
Amended 2005
- 2005 Pub. L. 109-59 Pub. L. 109–59, § 11113(b)(2), added subsec. (e) and redesignated former subsecs. (d) and (e) as (f) and (g), respectively.
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(1) In general For purposes of this section, the alternative fuel mixture credit is the product of 50 cents and the number of gallons of alternative fuel used by the taxpayer in producing any alternative fuel mixture for sale or use in a trade or business of the taxpayer.
(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—
Amended 2019, 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13204(d)(2), substituted “(E)” for “(F)” in introductory provisions.
- 2019 Pub. L. 116-94 Pub. L. 116–94, § 133(b)(1), in introductory provisions, substituted “mixture of alternative fuel (other than a fuel described in subparagraph (A), (C), or (F) of subsection (d)(2))” for “mixture of alternative fuel”.
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(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 This subsection shall not apply to any sale or use for any period after December 31, 2024.
Amended 2008, 2010, 2013, 2014, 2015, 2018, 2019, 2020, 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13201(d), substituted “December 31, 2024” for “December 31, 2021”.
- 2020 Pub. L. 116-260 Pub. L. 116–260 substituted “December 31, 2021” for “December 31, 2020”.
- 2019 Pub. L. 116-94 Pub. L. 116–94, § 133(a)(1), substituted “December 31, 2020” for “December 31, 2017”.
- 2018 Pub. L. 115-123 Pub. L. 115–123, § 40415(a)(1), substituted “December 31, 2017” for “December 31, 2016”.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 192(a)(1), substituted “December 31, 2016” for “December 31, 2014”.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 160(c)(1), which directed striking out “(September 30, 2014 in the case of any sale or use involving liquefied hydrogen)”, was executed by striking out “(September 30, 2014, in the case of any sale or use involving liquefied hydrogen)” before period at end, to reflect the probable intent of Congress.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 160(b)(1), substituted “December 31, 2014” for “December 31, 2013”.
- 2013 Pub. L. 112-240 Pub. L. 112–240, § 412(a), substituted “December 31, 2013” for “December 31, 2011”.
- 2010 Pub. L. 111-312 Pub. L. 111–312, § 704(a), substituted “December 31, 2011” for “December 31, 2009”.
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 204(a)(2), substituted “December 31, 2009” for “September 30, 2009”.
(f) Mixture not used as a fuel, etc.
Amended 2005
- 2005 Pub. L. 109-59 Pub. L. 109–59, § 11113(b)(2), added subsec. (e) and redesignated former subsecs. (d) and (e) as (f) and (g), respectively.
(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
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(2) Applicable laws All provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under paragraph (1) as if such tax were imposed by section 4081 and not by this section.
(g) Coordination with exemption from excise tax Rules similar to the rules under section 40(c) shall apply for purposes of this section.
Amended 2005
- 2005 Pub. L. 109-59 Pub. L. 109–59, § 11113(b)(2), added subsec. (e) and redesignated former subsecs. (d) and (e) as (f) and (g), respectively.
(h) Denial of double benefit No credit shall be determined under subsection (d) or (e) with respect to any fuel with respect to which credit may be determined under subsection (b) or (c) or under section 40, 40A, or 40B.
Amended 2007, 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13203(d)(2)(A)(ii), substituted “under section 40, 40A, or 40B” for “under section 40 or 40A”.
- 2007 Pub. L. 110-172 Pub. L. 110–172, § 5(a)(3), added subsec. (h).
(i) Limitation to fuels with connection to the United States
Amended 2008
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 203(c)(1), added subsec. (i).
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(1) Alcohol No credit shall be determined under this section with respect to any alcohol which is produced outside the United States for use as a fuel outside the United States.
(2) Biodiesel and alternative fuels No credit shall be determined under this section with respect to any biodiesel or alternative fuel which is produced outside the United States for use as a fuel outside the United States.
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—
Amended 2015
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 342(a), added subsec. (j).
(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
Amended 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13203(d)(1), added subsec. (k).
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(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
(2) Definitions Any term used in this subsection which is also used in section 40B shall have the meaning given such term by section 40B.
(3) Registration requirement For purposes of this subsection, rules similar to the rules of section 40B(f) shall apply.
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(4) Coordination of credits With respect to any gallon of sustainable aviation fuel in a qualified mixture, this subsection shall not apply to any such gallon for which a credit under section 45Z is allowable (as determined without regard to subsection (a)(1)(A) of such section).
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70521(g)(1)(A), added par. (4).
(5) Termination This subsection shall not apply to any sale or use for any period after September 30, 2025.
Amended 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70521(h), added par. (5).