Alternative Fuel Credit

§ 6426. Credit for alcohol fuel, biodiesel, and alternative fuel mixtures(a) Allowance of creditsThere shall be allowed as a credit—(1) against the tax imposed by section 4081 an amount equal to the sum of the credits described in subsections (b), (c), (e), and (k), and (2) against the tax imposed by section 4041 an amount equal to the sum of the credits described in subsection (d). No credit shall be allowed in the case of the credits described in subsections (d) and (e) unless the taxpayer is registered under section 4101. (b) Alcohol fuel mixture credit(1) In generalFor purposes of this section, the alcohol fuel mixture credit is the product of the applicable amount and the number of gallons of alcohol used by the taxpayer in producing any alcohol fuel mixture for sale or use in a trade or business of the taxpayer. (2) Applicable amountFor purposes of this subsection—(A) In generalExcept as provided in subparagraphs (B) and (C), the applicable amount is—(i) in the case of calendar years beginning before 2009, 51 cents, and (ii) in the case of calendar years beginning after 2008, 45 cents. (B) Mixtures not containing ethanolIn the case of an alcohol fuel mixture in which none of the alcohol consists of ethanol, the applicable amount is 60 cents. (C) Reduction delayed until annual production or importation of 7,500,000,000 gallonsIn the case of any calendar year beginning after 2008, if the Secretary makes a determination described in section 40(h)(3)(B) with respect to all preceding calendar years beginning after 2007, subparagraph (A)(ii) shall be applied by substituting “51 cents” for “45 cents”. (3) Alcohol fuel mixtureFor purposes of this subsection, the term “alcohol fuel mixture” means a mixture of alcohol and a taxable fuel which—(A) is sold by the taxpayer producing such mixture to any person for use as a fuel, or (B) is used as a fuel by the taxpayer producing such mixture. For purposes of subparagraph (A), a mixture produced by any person at a refinery prior to a taxable event which includes ethyl tertiary butyl ether or other ethers produced from alcohol shall be treated as sold at the time of its removal from the refinery (and only at such time) to another person for use as a fuel. (4) Other definitionsFor purposes of this subsection—(A) AlcoholThe term “alcohol” includes methanol and ethanol but does not include—(i) alcohol produced from petroleum, natural gas, or coal (including peat), or (ii) alcohol with a proof of less than 190 (determined without regard to any added denaturants). Such term also includes an alcohol gallon equivalent of ethyl tertiary butyl ether or other ethers produced from such alcohol. (B) Taxable fuelThe term “taxable fuel” has the meaning given such term by section 4083(a)(1).