Tax Type
Income Tax
Description
Biodiesel and green diesel fuel producers tax credit
Topic
Credits
Date Issued
02-04-2009
February 4, 2009
Dear *****:
***** has passed your request for clarification regarding Va. Code § 58.1-439.12:02 to me. Specifically, you are inquiring about the language in subsection B, which states, "The taxpayer shall be eligible for the credit during the first three years of production of biodiesel or green diesel fuels."
As you may be aware, Va. Code § 58.1-439.12:02 as enacted is very different from the version that was first introduced during the 2008 General Assembly session. Under the provisions of the introduced version of House Bill 139, a producer had to produce at least two million gallons of biodiesel fuels in order to be eligible for the credit. This was the only restriction placed on the producers. As enacted, however, the bill states that producers may only produce up to two million gallons. In addition, the credit is only available to producers during the first three years of production.
I interpret this language to mean that producers who wish to qualify for the credit are restricted in the number of gallons they may produce and that the credit is only available to them during the first three years of production. Therefore, if, as in your example, a taxpayer has been producing these fuels for three or more years prior to January 1, 2 008, then that taxpayer will not be eligible for the credit. Similarly, a taxpayer who has begun producing prior to January 1, 2008, may only claim the credit for the portion of the first three years of production that takes place in taxable years beginning on and after January 1, 2008.
I hope that you find these comments helpful. If you have any further questions regarding this matter, please do not hesitate to contact me. I can be reached at *****.
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- Sincerely,
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- Janie E. Bowen
Tax Commissioner
- Janie E. Bowen
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Rulings of the Tax Commissioner