Montana Biodiesel Laws and Incentives
State Incentives
Renewable Energy Property Tax Incentive
Property tax rate abatements are available for new investments in facilities that manufacture, research, or develop products related to biodiesel, biomass, biogas, coal-to-liquid fuels, ethanol, pipelines carrying "clean" products, renewable energy manufacturing plants, and research and development equipment for renewable energy. These incentives last for 15 years after facility start-up or the related equipment is purchased. The total time of the qualifying period may not exceed 19 years. (Reference Montana Code Annotated 15-24-3111)
Biodiesel Blending Tax Credit
A tax credit is available to businesses and individuals for up to 15% of the cost of qualified equipment used for storing or blending biodiesel with petroleum diesel for sale. The amount of the credit may not exceed $52,500 for a special fuel distributor and $7,500 for an owner or operator of a motor fuel outlet. The credit can be claimed in the two tax years before the year in which the taxpayer begins blending biodiesel for fuel or sale. (Reference Montana Code Annotated 15-32-703)
Biodiesel Production Facility Tax Credit
A tax credit is available to businesses and individuals for up to 15% of the cost of constructing and equipping a facility to be used for biodiesel or bio-lubricant production. The credit must be claimed in the tax year in which the facility begins production, and the facility must be in operation before January 1, 2015. Additionally, a tax credit is available for property used primarily to crush oilseed crops for purposes of biodiesel production. (Reference and Montana Code Annotated 15-32-701 and 15-32-702)
Biodiesel Production Incentive
A tax incentive is available to biodiesel producers during the first three years of production in the amount of $0.10 per gallon for each gallon of increased production over the previous year. For the purposes of this incentive, the production year begins July 1. This tax incentive is available until July 1, 2010. (Reference Montana Code Annotated 15-70-601)
Biodiesel Tax Refund
A licensed distributor who pays the special fuel tax on biodiesel may claim a refund equal to $0.02 per gallon of biodiesel sold during the previous quarter if the biodiesel is created entirely from biodiesel components produced in Montana. The owner or operator of a retail motor fuel outlet may claim a refund equal to $0.01 per gallon of biodiesel purchased from a licensed distributor if the biodiesel is created entirely from biodiesel components produced in Montana. (Reference Montana Code Annotated 15-70-369)
Alternative Fuel Vehicle (AFV) Conversion Tax Credit
An income tax credit is available to businesses or individuals for up to 50% of the equipment and labor costs for converting vehicles to operate using alternative fuels. Qualified alternative fuels are compressed and liquefied natural gas, liquefied petroleum gas, hydrogen, electricity, and fuel containing at least 85% ethanol or methanol. A maximum credit of $500 is available for the conversion of vehicles with a Gross Vehicle Weight Rating (GVWR) of 10,000 pounds (lbs.) or less and $1,000 for vehicles with a GVWR of more than 10,000 lbs. The credit must be applied in the year the conversion is made, and the seller of an alternative fuel may not receive a credit for converting their own vehicles to operate on the alternative fuel they sell. (Reference Montana Code Annotated 15-30-164)
State Laws and Regulations
Biodiesel Tax Exemption
Biodiesel produced from waste vegetable oil feedstock after June 30, 2009, is exempt from the state special fuel tax. (Reference House Bill 416, 2009, and Montana Code Annotated 15-70-301 and 15-70-321)
Biofuels Promotion
In support of the "25 x 25" initiative to increase production of renewable energy by the agricultural community, the Montana legislature supports the development of a broad spectrum of renewable energy resources, including biofuels, with the goal of agriculture providing 25% of the total energy consumed in the United States by the year 2025. (Reference House Joint Resolution 6, 2007)
Alternative Fuel Promotion
The state of Montana encourages the use of alternative fuels and fuel blends to the extent that doing so produces environmental and economic benefits to the citizens of Montana. The state legislature recommends several guidelines for the development of a state alternative fuels policy, including the following: 1) encourage the use of self-sufficient markets; 2) any state alternative fuels program should have measurable benefits and be communicated to the public; 3) state and local governments should be encouraged to set an example with their vehicle fleets by using alternative fuels and fuel blends. The state also encourages production of alternative fuels and fuel blends. (Reference Montana Code Annotated 90-4-1011)
