Biomass Funding Opportunities

2007 Laws | Tax Forms | Landfill Gas | Flex-Fuel Vehicles | Ethanol | Biodiesel

For more information about South Carolina incentives passed in July 2007 please refer to the following documents:

2007 SC biomass laws
Timeline of SC law implementation

* Please watch for more updates in the future.

Alternative Fuel Manufacturer License Application Form

In order to claim the alternative fuel production credits, manufacturers of alternative fuels must complete the license application form. To download the complete form, click here.

Alternative Fuel Vehicle Tax Incentive Form

The SC Department of Revenue has an alternative fuel vehicle state income tax credit for purchasers of alternative fuel vehicles. To download the complete form, click here.

Alternative Fuel Vehicle Tax Rebate Form

The SC Department of Revenue has an alternative fuel vehicle tax rebate forms which reimburse purchasers of flexible fuel vehicles, hydrogen-powered, and plug-in hybrid vehicles, between $300-500. To download the complete form, click here.

Retailer Incentive Payment Form

Retailers are entitled to a $.05 incentive payment for each gallon of biodiesel or ethanol fuel sold as long as the fuel is at least $.05 cheaper then the comparable fuel sold at the same facility. Click here for more information, and here for the tax form.

Landfill Gas

Incentives to purchase landfill gas

At the end of the 2006 legislative session, the General Assembly passed S.1245, including a provision providing tax credits for manufacturers to purchase landfill gas (methane) to power facilities.

 The provision includes:

1)      Starting in the 2006 tax year, a manufacturing facility could claim up to 25 percent of the landfill gas energy costs.

2)      Unused tax credits may be carried forward up to ten years.

 The full text is as follows:

SECTION 38.  Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding:

"Section 12-6-3620.  

(A)    For taxable years beginning after 2006, there is allowed a tax credit against the tax imposed pursuant to Section 12-6-530 for twenty-five percent of the costs incurred by a taxpayer for use of methane gas taken from a landfill to provide power for a manufacturing facility.

(B)    The tax credit allowed by this section may not exceed fifty percent of the liability of the taxpayer for the tax imposed pursuant to Section 12-6-530. Unused credits may be carried forward for ten years.

(C)    For purposes of this section, manufacturing facility is as defined in Section 12-6-3360(M)(5)."

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Flex-Fuel Vehicles

Incentives to purchase flex-fuel vehicles

An Alternative Energy Proviso attached to the Fiscal Year 2007 Budget Bill (House Bill 4810) provides a sales tax rebate of $300 on purchases of flex-fuel vehicles.  Flex-fuel vehicles are vehicles that can run on conventional gasoline or E85 fuel, which is a blend of 85 percent ethanol and 15 percent conventional gasoline.

 The provision includes:

The Proviso wording is as follows: (1)   There shall be a $300 sales tax rebate for in-state purchases of all Flex-Fuel Vehicles (FFV), capable of operating on E85 motor fuel. The rebate shall be in the form of a payment sent to the buyer upon completion of a form created by the Department of Revenue and made available to the public, dealers, and the Department of Motor Vehicles. Eligible vehicles for each model year are those models identified by the manufacturer as being flexible-fuel vehicles capable of operating on E85 motor fuel. E85 motor fuel is a fuel comprised of eighty-five percent ethanol fuel and fifteen percent gasoline fuel.

 The full text is as follows:

To view the full text of the Alternative Energy Budget Proviso, click here. (Scroll down to 72.113.)

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Ethanol Fuel

Incentives to purchase E-85

The Alternative Energy Proviso attached to the Fiscal Year 2007 Budget Bill provides an incentive payment to E85 retailers of $.05 per gallon of E85 they sell.  To qualify for the incentive, the retail price of a gallon of E85 must be at least $.05 less than the retail price of a gallon of the least expensive conventional gasoline available at a station.

The provision includes:

The section of the Budget Proviso providing this incentive is worded as follows: There shall be a five cents incentive payment to the retailer for each gallon of E85 fuel sold, provided that the E85 fuel is subject to the South Carolina motor fuel tax and the price of the E85 fuel is at least five cents lower than the price of the lowest selling non-E85 gasoline fuel being sold at the same retail facility. The payment shall be made to the retailer upon compliance with verification procedures set forth by the Department of Agriculture.

 The full text is as follows:

To view the full text of the Alternative Energy Budget Proviso, click here. (Scroll down to 72.113.)

Incentives to produce ethanol

Senate Bill 1245 provides tax incentives for the production of ethanol fuel.  Beginning in 2007 and extending to 2014, ethanol production facilities will receive a credit of $.20 per gallon of ethanol produced.  The tax credit is allowed for 60 months, and covers up to 25 million gallons per year.

 The provision includes:

The section of  S. 1245 providing this incentive is worded as follows:  SECTION    36.A.    Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding: "Section 12-6-3600.    (A)    For taxable years beginning after 2006, and before 2014, there is allowed a credit against the tax imposed pursuant to this chapter for any ethanol or biodiesel facility which is in production at the rate of at least twenty-five percent of its name plate design capacity for the production of ethanol or biodiesel, before denaturing, on or before December 31, 2009. The facility must be placed in use after 2006. The credit equals twenty cents a gallon of ethanol or biodiesel produced and is allowed for sixty months beginning with the first month for which the facility is eligible to receive the credit and ending not later than December 31, 2014. The credit only may be claimed if the ethanol or biodiesel facility maintains an average production rate of at least twenty-five percent of its name plate design capacity for at least six months after the first month for which it is eligible to receive the credit.

 The full text is as follows:

To view S. 1245 in its entirety, click here.

Incentives to purchase equipment to produce ethanol

Senate Bill 1245 provides tax incentives for purchase of equipment to be used for producing ethanol and/or biodiesel fuels.  Ethanol and/or biodiesel producers who purchase such equipment will receive a tax credit equal to 25 percent of the total cost of the equipment.  This credit will be distributed in 7 equal installments over 3 years.  To qualify for the credit, the equipment must be used exclusively for producing ethanol and/or biodiesel.

The provision includes:

The section of S. 1245 providing this incentive is worded as follows:  A taxpayer that constructs and places in service in this State a commercial facility for processing renewable fuel is allowed a credit equal to twenty-five percent of the cost to the taxpayer of constructing and equipping the facility. The entire credit may not be taken for the taxable year in which the facility is placed in service but must be taken in seven equal annual installments beginning with the taxable year in which the facility is placed in service. If, in one of the years in which the installment of a credit accrues, the facility with respect to which the credit was claimed is disposed of or taken out of service, the credit expires and the taxpayer may not take any remaining installment of the credit. The unused portion of an unexpired credit may be carried forward for not more than ten succeeding taxable years.

The full text is as follows:

To view S. 1245 in its entirety, click here.

Incentives to purchase equipment to dispense ethanol

Senate Bill 1245 provides tax incentives for purchases of equipment to be used for dispensing ethanol and biodiesel fuels.  Retailers who purchase such equipment will receive a tax credit equal to 25 percent of the total cost of the equipment.  This credit will be distributed in 3 equal installments over 3 years.  To qualify for the credit, the equipment must be used exclusively for dispensing ethanol or biodiesel.

The provision includes:

The section of  S. 1245 providing this incentive is worded as follows:  A taxpayer that constructs and installs and places in service in this State a qualified commercial facility for distribution or dispensing renewable fuel is allowed a credit equal to twenty-five percent of the cost to the taxpayer against the taxpayer's liability for a tax imposed pursuant to this chapter constructing and installing the part of the distribution facility dispensing facility, including pumps, storage tanks, and related equipment, that is directly and exclusively used for distribution, dispensing, or storing renewable fuel. A facility is qualified if the equipment used to store, distribute, or dispense renewable fuel is labeled for this purpose and clearly identified as associated with renewable fuel. The entire credit may not be taken for the taxable year in which the facility is placed in service but must be taken in three equal annual installments beginning with the taxable year in which the facility is placed in service. If, in one of the years in which the installment of a credit accrues, the portion of the facility directly and exclusively used for distributing, dispensing, or storing renewable fuel is disposed of or taken out of service, the credit expires and the taxpayer may not take any remaining installment of the credit. The unused portion of an unexpired credit may be carried forward for not more than ten succeeding taxable years.

The full text is as follows:

To view S. 1245 in its entirety, click here.

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Biodiesel

Incentives to purchase B20 fuel

The Alternative Energy Proviso attached to the Fiscal Year 2007 Budget Bill provides an incentive payment to B20 retailers of $.05 per gallon of B20 they sell.  To qualify for the incentive, the retail price of a gallon of B20 must be at least $.05 less than the retail price of a gallon of the least expensive conventional diesel fuel available at a station.  The same incentive will be available to retailers of B20 sold as dyed diesel fuel for off-road uses. 

The provision includes:

The section of the Budget Proviso providing this incentive is worded as follows: (2)   There shall be a five cents incentive payment to the retailer for each gallon of B20 fuel sold, provided that the B20 fuel is subject to the South Carolina motor fuel tax and the price of the B20 fuel is at least five cents lower than the price of the lowest selling non-B20 diesel fuel being sold at the same retail facility. B20 fuel is a fuel that is twenty percent biodiesel fuel and eighty percent petroleum-based diesel fuel. Biodiesel fuel is a fuel for motor vehicle diesel engines comprised of vegetable oils or animal fats and meeting the specifications of ASTM (American Society of Testing and Materials) D 5761. The payment shall be made to the retailer upon compliance with verification procedures set forth by the Department of Agriculture. (3)   There shall be a five cents incentive payment to the retailer or wholesaler for each gallon of B20 fuel sold as dyed diesel fuel for "off-road" uses, provided the price of the B20 dyed fuel is at least five cents lower than the price the lowest selling non-B20 dyed diesel fuel. The payment shall be made to the retailer upon compliance with verification procedures set forth by the Department of Agriculture.

The full text is as follows:

To view the full text of the Alternative Energy Budget Proviso, click here. (Scroll down to 72.113.)

Incentives to produce biodiesel fuel

Senate Bill 1245 provides tax incentives for the production of biodiesel fuel.  Beginning in 2007 and extending to 2014, biodiesel production facilities will receive a credit of $.20 per gallon of biodiesel fuel produced.  This tax credit is allowed for 60 months, and covers up to 25 million gallons per year.

The provision includes:

The section of  S. 1245 providing this incentive is worded as follows:  SECTION    36.A.    Article 25, Chapter 6, Title 12 of the 1976 Code is amended by adding: "Section 12-6-3600.    (A)    For taxable years beginning after 2006, and before 2014, there is allowed a credit against the tax imposed pursuant to this chapter for any ethanol or biodiesel facility which is in production at the rate of at least twenty-five percent of its name plate design capacity for the production of ethanol or biodiesel, before denaturing, on or before December 31, 2009. The facility must be placed in use after 2006. The credit equals twenty cents a gallon of ethanol or biodiesel produced and is allowed for sixty months beginning with the first month for which the facility is eligible to receive the credit and ending not later than December 31, 2014. The credit only may be claimed if the ethanol or biodiesel facility maintains an average production rate of at least twenty-five percent of its name plate design capacity for at least six months after the first month for which it is eligible to receive the credit.

The full text is as follows:

 To view S. 1245 in its entirety, click here.

The Alternative Energy Proviso attached to the Fiscal Year 2007 Budget Bill also provides tax incentives for biodiesel production.  The Proviso provides a $.20 per gallon income tax credit for biodiesel producers that use soybeans as the feedstock for their fuel.  It provides a $.30 per gallon income tax credit for biodiesel producers that use non-soy-based feedstock.  Both credits cover up to 3 million gallons per year for up to 5 tax years, beginning after December 31, 2005.

The provision includes:

The section of the Budget Proviso providing this incentive is worded as follows: (C)   The following income tax credits shall apply to taxes imposed by Sections 12-6-510 and 12-6-530 of the 1976 Code for tax years beginning after December 31, 2005.  (1)   There shall be a business or personal income tax credit of twenty cents for each gallon of biodiesel motor fuel produced mostly from soybean oil and sold, up to a maximum of three million gallons per year from each facility, for a maximum of five years for each facility. Credits are available for not more than one facility in each county in any calendar year, with priority given to the first facility in a county that produces biodiesel motor fuel using soybean oil as the feedstock. Credits are available to individuals or businesses producing motor fuel mostly from soybean oil for internal use without regard to the per county limitation. This credit may be carried forward for up to three years. The payment shall be made upon compliance with verification procedures set forth by the Department of Agriculture.  (2)   There shall be a business or personal income tax credit of thirty cents for each gallon of biodiesel motor fuel a majority of which is produced from feedstock other than soybean oil and sold, up to a maximum of three million gallons per year, for a maximum of five years. Credits are available for not more than one facility in each county in any calendar year, with priority given to the first facility in a county that produces biodiesel motor fuel using a feedstock other than soybean oil. Credits are available to individuals or businesses producing biodiesel motor fuel for internal use, a majority of which is derived from feedstock other than soybean oil, without regard to the per county limitation. This credit may be carried forward for up to three years. The payment shall be made upon compliance with verification procedures set forth by the Department of Agriculture.

The full text is as follows:

To view the full text of the Alternative Energy Budget Proviso, click here. (Scroll down to 72.113.)

Incentives to purchase equipment to produce biodiesel

Senate Bill 1245 provides tax incentives for purchase of equipment to be used for producing ethanol and/or biodiesel fuels.  Ethanol and/or biodiesel producers who purchase such equipment will receive a tax credit equal to 25 percent of the total cost of the equipment.  This credit will be distributed in 7 equal installments over 3 years.  To qualify for the credit, the equipment must be used exclusively for producing ethanol and/or biodiesel.

The provision includes:

The section of S. 1245 providing this incentive is worded as follows:  A taxpayer that constructs and places in service in this State a commercial facility for processing renewable fuel is allowed a credit equal to twenty-five percent of the cost to the taxpayer of constructing and equipping the facility. The entire credit may not be taken for the taxable year in which the facility is placed in service but must be taken in seven equal annual installments beginning with the taxable year in which the facility is placed in service. If, in one of the years in which the installment of a credit accrues, the facility with respect to which the credit was claimed is disposed of or taken out of service, the credit expires and the taxpayer may not take any remaining installment of the credit. The unused portion of an unexpired credit may be carried forward for not more than ten succeeding taxable years.

The full text is as follows:

To view S. 1245 in its entirety, click here.

Incentives to purchase equipment to dispense biodiesel

Senate Bill 1245 provides tax incentives for purchases of equipment to be used for dispensing ethanol and biodiesel fuels.  Retailers who purchase such equipment will receive a tax credit equal to 25 percent of the total cost of the equipment.  This credit will be distributed in 3 equal installments over 3 years.  To qualify for the credit, the equipment must be used exclusively for dispensing ethanol or biodiesel.

The provision includes:

The section of  S. 1245 providing this incentive is worded as follows:  A taxpayer that constructs and installs and places in service in this State a qualified commercial facility for distribution or dispensing renewable fuel is allowed a credit equal to twenty-five percent of the cost to the taxpayer against the taxpayer's liability for a tax imposed pursuant to this chapter constructing and installing the part of the distribution facility dispensing facility, including pumps, storage tanks, and related equipment, that is directly and exclusively used for distribution, dispensing, or storing renewable fuel. A facility is qualified if the equipment used to store, distribute, or dispense renewable fuel is labeled for this purpose and clearly identified as associated with renewable fuel. The entire credit may not be taken for the taxable year in which the facility is placed in service but must be taken in three equal annual installments beginning with the taxable year in which the facility is placed in service. If, in one of the years in which the installment of a credit accrues, the portion of the facility directly and exclusively used for distributing, dispensing, or storing renewable fuel is disposed of or taken out of service, the credit expires and the taxpayer may not take any remaining installment of the credit. The unused portion of an unexpired credit may be carried forward for not more than ten succeeding taxable years.

The full text is as follows:

To view S. 1245 in its entirety, click here.

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