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Current Year Tax Map
Publication 510
taxmap/pubs/p510-014.htm#en_us_publink1000118032

Cellulosic or Second Generation Biofuel Not Used as Fuel(p14)

rule
If you claimed the section 40 cellulosic or second generation biofuel producer credit, you are liable for an excise tax on each gallon of cellulosic or second generation biofuel if you do not use the fuel for the purposes described under Qualified Cellulosic Biofuel Production or Qualified Second Generation Biofuel Production next.
taxmap/pubs/p510-014.htm#en_us_publink1000307482

Qualified Cellulosic Biofuel Production.(p14)

rule
This is cellulosic biofuel which during the tax year:
  1. Is sold by the producer to another person—
    1. For use by the buyer in the buyer’s trade or business to produce a qualified cellulosic biofuel mixture (other than casual off-farm production),
    2. For use by the buyer as a fuel in a trade or business, or
    3. Who sells the cellulosic biofuel at retail to another person and puts the cellulosic biofuel in the retail buyer’s fuel tank; or
  2. Is used or sold by the producer for any purpose described in (1) above.
Qualified cellulosic biofuel production does not include purchasing alcohol and increasing the proof of the alcohol through additional distillation. Nor does it include cellulosic biofuel that is not both produced in the United States or a U.S. possession and used as a fuel in the United States or a U.S. possession.
A qualified cellulosic biofuel mixture combines cellulosic biofuel with gasoline or a special fuel. The producer of the mixture either:
taxmap/pubs/p510-014.htm#en_us_publink1000307483

Qualified Second Generation Biofuel Production.(p14)

rule
This is second generation biofuel which during the tax year:
  1. Is sold by the producer to another person–
    1. For use by the buyer in the buyer’s trade or business to produce a qualified second generation biofuel mixture (other than casual off-farm production),
    2. For use by the buyer as a fuel in a trade or business, or
    3. Who sells the second generation biofuel at retail to another person and puts the second generation biofuel in the retail buyer’s fuel tank; or
  2. Is used or sold by the producer for any purpose described in (1) above.
Qualified second generation biofuel production does not include purchasing alcohol and increasing the proof of the alcohol through additional distillation. Nor does it include second generation biofuel that is not both produced in the United States or a U.S. possession and used as a fuel in the United States or a U.S. possession. A qualified second generation biofuel mixture combines second generation biofuel with gasoline or a special fuel. The producer of the mixture either:
Report the tax on Form 720. The rate of tax depends on the applicable rate used to figure the credit. No deposits are required.