Biodiesel Mixture Credit

§ 40A. Biodiesel and renewable diesel used as fuel(a) General ruleFor purposes of section 38, the biodiesel fuels credit determined under this section for the taxable year is an amount equal to the sum of—(1) the biodiesel mixture credit, plus (2) the biodiesel credit, plus (3) in the case of an eligible small agri-biodiesel producer, the small agri-biodiesel producer credit. (b) Definition of biodiesel mixture credit, biodiesel credit, and small agri-biodiesel producer creditFor purposes of this section—(1) Biodiesel mixture credit(A) In generalThe biodiesel mixture credit of any taxpayer for any taxable year is $1.00 for each gallon of biodiesel used by the taxpayer in the production of a qualified biodiesel mixture. (B) Qualified biodiesel mixtureThe term “qualified biodiesel mixture” means a mixture of biodiesel and diesel fuel (as defined in section 4083(a)(3)), determined without regard to any use of kerosene, which—(i) is sold by the taxpayer producing such mixture to any person for use as a fuel, or (ii) is used as a fuel by the taxpayer producing such mixture. (C) Sale or use must be in trade or business, etc.Biodiesel used in the production of a qualified biodiesel mixture shall be taken into account—(i) only if the sale or use described in subparagraph (B) is in a trade or business of the taxpayer, and (ii) for the taxable year in which such sale or use occurs. (D) Casual off-farm production not eligibleNo credit shall be allowed under this section with respect to any casual off-farm production of a qualified biodiesel mixture. (2) Biodiesel credit(A) In generalThe biodiesel credit of any taxpayer for any taxable year is $1.00 for each gallon of biodiesel which is not in a mixture with diesel fuel and which during the taxable year—(i) is used by the taxpayer as a fuel in a trade or business, or (ii) is sold by the taxpayer at retail to a person and placed in the fuel tank of such person’s vehicle. (B) User credit not to apply to biodiesel sold at retailNo credit shall be allowed under subparagraph (A)(i) with respect to any biodiesel which was sold in a retail sale described in subparagraph (A)(ii). (3) Certification for biodieselNo credit shall be allowed under paragraph (1) or (2) of subsection (a) unless the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer or importer of the biodiesel which identifies the product produced and the percentage of biodiesel and agri-biodiesel in the product. (4) Small agri-biodiesel producer credit(A) In generalThe small agri-biodiesel producer credit of any eligible small agri-biodiesel producer for any taxable year is 20 cents for each gallon of qualified agri-biodiesel production of such producer.