Important Tax Credit Information for Ag Producers Related to Renewable Energy
2/13/2008
In an effort to ensure that agricultural producers, and others involved in the
collection or production of biofuels or renewable energy, are aware of new tax
credits available for such activities, the following information is from the OR
Dept. of Revenue and the OR Dept. of Energy.
Business Energy Tax Credits for Solar
http://oregon.gov/ENERGY/RENEW/Solar/Support-BETC.shtml
Tax Credits: Biomass
production/collection
Oregon’s Tax Credits
for Biofuel Crop Production
https://secure.dor.state.or.us/piti/index.cfm?action=topic&id=128
ORS Chapter 315.141
[Credit code 743]
New for 2007, if you produce or collect biomass to be use in Oregon as biofuel,
you may be eligible for a tax credit on your Oregon income tax return.
Who qualifies?
If you are an agricultural producer or collector of biomass that is used in
Oregon as biofuel or to produce biofuel, you can claim a credit up to the amount
of your tax liability.
The credit is claimed in the tax year that you transfer the biomass to a biofuel
producer.
Biomass is renewable or recurring organic matter. It comes from:
Biomass does not include wood treated with creosote or inorganic chemical
compounds.
How to compute your credit
Use the following table to compute your credit. Multiply your biomass production
or collection by the following rates:
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Animal manure or renderings: $5 per wet ton.
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Grain crops: $0.90 per bushel.
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Grass, wheat, and straw biomass: $10 per green ton.
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Oil seed crops: $0.05 per pound.
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Used cooking oil or waste grease: $0.10 per gallon.
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Virgin oil or alcohol from Oregon-based feed stock: $0.10 per gallon.
-
Wastewater biosolids: $10 per wet ton.
-
Woody biomass collected from property in Oregon: $10 per green ton.
-
Yard debris or food waste: $5 per wet ton.
How to claim the credit
The biofuel producer must provide you with a written receipt at the time of
the transfer. The receipt must state the quantity and type of biomass being
transferred. Use this information to compute your allowable credit. Enter the
amount as an "Other credit" on your Oregon income tax return. Use numeric code
743 to identify the credit.
The receipt must also certify that the biomass is to be used to produce biofuel.
You must keep these records for five years. Keep these records with a copy of
your tax return. Do not send them to the department.
Carryforward. Any credit that exceeds your tax liability can be carried forward
for four years. Any credit remaining after that is lost. The credit is not
refundable.
Part-year residents and nonresidents. You must prorate your credit by your
Oregon percentage.
Credit transfers. In the first year of eligibility, you may transfer your credit
to another taxpayer. You and the transferee must jointly file a notice of tax
credit transfer with the department. Go to our website to download Transfer
Notice for Certain Credits or contact us. Both parties must complete and sign
the notice.
Be sure to give copies of the receipts used to compute the credit to the
transferee for their records.
-
If you are a producer, you may not transfer your credit to a collector who is
claiming a collection credit for the same biomass.
-
If you are a collector, you may not transfer your credit to a producer who is
claiming a production credit for the same biomass.
Attach the transfer notice to the tax return of the taxpayer claiming the
credit.
Revised 12/31/2007
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Oregon farmers who grow crops that are processed into transportation fuel may be
eligible for tax credits. The tax credit is a dollar-for dollar credit against
State of Oregon income taxes owed. Below is a summary of three incentive credits
currently offered by the State of Oregon.
Oregon Income Tax Credits for Biomass Producers and Collectors
Provided for in House Bill 2210
Credit 1
House Bill 2210 provides a package of measures to encourage development,
distribution and use of agricultural and forest material for biofuel. Producers
or collectors of Oregon sourced biomass or energy crops, used for energy
production in Oregon, are eligible for tax credit incentives based upon volume
of production or collection. Producers of neat ethanol or pure bio-oils, from
Oregon feedstock, are also eligible for tax credits.
The credits provided for under HB 2210 are:
-
Oil seed crops, $0.05 per pound.
-
Grain crops, including but not limited to wheat, barley and triticale, $0.90 per
bushel.
-
Grains do not include corn; wheat is eligible after January 1, 2009.
-
Virgin oil or alcohol from Oregon-based feedstock, $0.10 per gallon.
-
Used cooking oil or waste grease, $0.10 per gallon.
-
Wastewater biosolids, $10.00 per wet ton.
-
Woody biomass collected from nursery, orchard, agricultural, forest or rangeland
property in Oregon, including but not limited to prunings, thinning, planting
rotations, log landing or slash resulting from harvest or forest health
stewardship, $10.00 per green ton.
-
Grass, straw or other vegetative biomass from agricultural crops, $10.00 per
green ton.
-
Yard debris and municipally generated food waste, $5.00 per wet ton.
-
Animal manure or rendering offal, $5.00 per wet ton.
Tax credits for producers and collectors may be claimed for biomass collected or
produced on or after January 1, 2007, and before January 1, 2013. The bill also
provides a four-year carry forward for the tax credit in the event of no tax
liability. Additionally the bill allows transfer of the credit to a taxpayer
with liability.
For more information go to
www.Oregon.gov/energy
or contact Mark Kendall at 1-800-221-8035 or 503-378-6043
mark.w.kendall@state.or.us
Oregon’s Business Energy Tax Credit Program For Biofuel Producers and Biofuel
Feedstock Producers and Collectors
Credit 2
Capital costs of equipment necessary to plant, grow, harvest, collect, store,
produce, crush or concentrate and transport biofuel crops, feedstocks or
materials are eligible for the credit. The tax credit is a dollar-for-dollar
credit against State of Oregon income taxes owed. These projects are considered
to be renewable energy projects and are therefore eligible for a 50 percent
credit based on eligible capital costs with a maximum of $20 million per project
per year. The applicant must apply before a financial commitment is made to the
project. If the project is over $20,000 in eligible costs the credit is taken
over a five-year period; if under the credit may be claimed in one year. A
pass-through option allows the project owner to transfer the credit to a third
party in exchange for a one-time payment of 33.5 percent for projects more than
$20,000 and 43.5 percent for projects $20,000 and less.
https://secure.dor.state.or.us/piti/index.cfm?action=topic&id=129
For more information go to
www.Oregon.gov/energy or contact Rick Wallace at 1-800-221-8035 or
503-378-3265 rick.wallace@state.or.us
Biofuels Crop Production Credit
Credit 3
Note that the Biofuels Crop Production Credit is limited to 2008. If you are
interested in this credit, contact the OR Dept. of Energy right away.
Oregon farmers who grow crops specifically for biofuel production may be
eligible for a tax credit based on eligible capital cost. New, used or existing
equipment that is dedicated to production of biofuel crops could be eligible.
For equipment used only a portion of the time towards production of biofuel
crops the eligible costs will be prorated. The current appraised value of
existing equipment, re-dedicated to produce a biofuel crop may be eligible for
the tax credit. Under Oregon statute, you must provide proof of the capital cost
or expense to be eligible for tax credits. The remaining appraised value of
equipment, newly dedicated to biofuel crop production, can be transferred to a
limited liability corporation or transferred from one farm business entity to
another for the purpose of defining and proving eligible cost under Oregon tax
law.
All remaining appraised value of the equipment may be eligible for the tax
credit if the equipment is fully dedicated to biofuel crop production. The cost
would have to be pro-rated if the equipment is expected to be used only a
portion of the time for biofuel crops. Additionally the capital cost of seed and
materials necessary for production during the growth season may be eligible.
This third program described above is for a limited time only and will not be
offered after December 31, 2008. The Oregon Department of Energy offers this
incentive as a Research, Development & Demonstration project.
For more information go to
www.Oregon.gov/energy or contact Rick Wallace at 1-800-221-8035 or
503-378-3265 rick.wallace@state.or.us. |
