South Carolina Incentives and Laws for Ethanol
The list below contains summaries of all South Carolina incentives and laws related to Ethanol.
State Incentives
Biofuels Retail Incentive
Ethanol retailers selling fuel blends of at least 70% ethanol (E70) are eligible for a $0.05 incentive per gallon of ethanol blended fuel sold, provided that the fuel is subject to the South Carolina motor fuel user fee. Additionally, biodiesel retailers are eligible for a $0.25 incentive per gallon of biodiesel (B100) sold as pure biodiesel or as part of a biodiesel blend, provided that the blend contains at least 2% biodiesel (B2). These incentives apply only to fuel sold before July 1, 2012. Biodiesel is defined as a fuel for motor vehicle diesel engines comprised of vegetable oils or animal fats and meeting ASTM specifications D6751 or D975. (Reference South Carolina Code of Laws 12-63-20)
Biofuels Production Tax Credit
Qualified corn-based ethanol and soy-based biodiesel producers are eligible for an income tax credit of $0.20 per gallon of fuel produced through 2016. Producers using feedstocks other than corn or soy oil are eligible for $0.30 per gallon tax credit. An eligible production facility must be operating at a production rate of at least 25% of its name plate design capacity and must maintain that production rate for at least six months, before denaturing, on or before December 31, 2011. The credit is allowed for up to 60 months beginning with the first month for which the facility is eligible to receive the credit and ending before December 31, 2016. Beginning January 1, 2017, the credit changes to $0.075 per gallon of fuel produced. The credit may be carried forward for ten years. Additional restrictions apply. (Reference South Carolina Code of Laws 12-6-3600)
Biofuels Distribution Infrastructure Tax Credit
A taxpayer that purchases, constructs, or installs, and places into service a qualified commercial facility for distributing or dispensing of biofuels is eligible for an income tax credit of up to 25% of the purchase, construction, and installation costs. Eligible property includes pumps, storage tanks, and related equipment used exclusively for distribution, dispensing, and storing biofuels. A qualified facility must clearly label the equipment used to store or dispense the fuel as being associated with the biofuel. The credit must be taken in three equal annual installments beginning with the taxable year in which the facility is placed into service. Qualifying fuels include blends containing at least 70% ethanol (E70) dispensed at the retail level for use in motor vehicles, and pure ethanol or biodiesel fuel dispensed by a distributor or facility that blends these non-petroleum liquids with gasoline or diesel fuel for use in motor vehicles. (Reference South Carolina Code of Laws 12-6-3610)
Biofuels Production Facility Tax Credit
A taxpayer that constructs and places into service a commercial facility for the production of biofuel is eligible for a tax credit of up to 25% of the cost of constructing or renovating a building and equipping the facility. Production of biofuel includes intermediate steps such as milling, crushing, and handling feedstock and the distillation and manufacturing of the final product. The entire credit must be taken in seven equal annual installments beginning with the taxable year in which the facility is placed into service. Qualifying fuels include liquid non-petroleum based fuel that can be placed in motor vehicle fuel tanks and used to operate on-road vehicles, including all forms of fuel commonly or commercially known or sold as biodiesel and ethanol. (Reference South Carolina Code of Laws 12-6-3610)
Laws and Regulations
Biofuel Blending Capability Requirements and Regulations
Fuel retailers that offer gasoline or diesel that is not blended with ethanol or biodiesel must ensure that their fuel is suitable for subsequent blending with biofuels. Retailers must also ensure that gasoline contains additives typically found in a product pre-blended with ethanol. Retailers, however, are not liable for fines, penalties, injuries, or damages resulting from subsequent blending of fuel sold at their locations. Furthermore, no individual or entity can deny a distributor and retailer from blending biofuels for sale in South Carolina, as long as the individual or entity is registered with the U.S. Internal Revenue Service. (Reference South Carolina Code of Laws 39-41-235)
State Agency Preference for Alternative Fuel and Advanced Vehicles
State agencies purchasing motor vehicles must give preference to hybrid, plug-in hybrid electric, biodiesel, hydrogen, fuel cell, or flexible fuel vehicles when the performance, quality, and anticipated lifecycle costs are comparable to other available motor vehicles. (Reference South Carolina Code of Laws 1-11-310)
State Agency Alternative Fuel Use Requirement
Whenever practical and economically feasible, all state agencies operating alternative fuel vehicles must use alternative fuels in those vehicles. Private businesses are encouraged to increase the use of alternative fuels in the state. (Reference Executive Order 2001-35)
Alternative Fuel Tax
Alternative fuels and blended fuels are exempt from the state sales and use tax. These fuels are, however, subject to a state fuels user fee of $0.16 per gallon. Alternative fuels include liquefied petroleum gas (propane) and compressed natural gas. Blended fuels are defined as mixtures composed of gasoline or diesel fuel and another liquid, other than products such as carburetor detergent or oxidation inhibitor, that can be used as a fuel to operate a highway vehicle. (Reference South Carolina Code of Laws 12-28-110, 12-28-310, and 12-36-2120(15))
