{"identifier":"/us/usc/t26/s40A","title":26,"num":"\u00a7\u202f40A.","heading":"Biodiesel and renewable diesel used as fuel","text":"\u00a7\u202f40A.\nBiodiesel and renewable diesel used as fuel\n(a)\nGeneral rule\nFor purposes of section 38, the biodiesel fuels credit determined under this section for the taxable year is an amount equal to the sum of\u2014\n(1) the biodiesel mixture credit, plus\n(2) the biodiesel credit, plus\n(3) in the case of an eligible small agri-biodiesel producer, the small agri-biodiesel producer credit.\n(b)\nDefinition of biodiesel mixture credit, biodiesel credit, and small agri-biodiesel producer credit\nFor purposes of this section\u2014\n(1)\nBiodiesel mixture credit\n(A)\nIn general\nThe 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.\n(B)\nQualified biodiesel mixture\nThe term \u201cqualified biodiesel mixture\u201d means a mixture of biodiesel and diesel fuel (as defined in section 4083(a)(3)), determined without regard to any use of kerosene, which\u2014\n(i) is sold by the taxpayer producing such mixture to any person for use as a fuel, or\n(ii) is used as a fuel by the taxpayer producing such mixture.\n(C)\nSale or use must be in trade or business, etc.\nBiodiesel used in the production of a qualified biodiesel mixture shall be taken into account\u2014\n(i) only if the sale or use described in subparagraph (B) is in a trade or business of the taxpayer, and\n(ii) for the taxable year in which such sale or use occurs.\n(D)\nCasual off-farm production not eligible\nNo credit shall be allowed under this section with respect to any casual off-farm production of a qualified biodiesel mixture.\n(2)\nBiodiesel credit\n(A)\nIn general\nThe 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\u2014\n(i) is used by the taxpayer as a fuel in a trade or business, or\n(ii) is sold by the taxpayer at retail to a person and placed in the fuel tank of such person\u2019s vehicle.\n(B)\nUser credit not to apply to biodiesel sold at retail\nNo 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).\n(3)\nCertification for biodiesel\nNo 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.\n(4)\nSmall agri-biodiesel producer credit\n(A)\nIn general\nThe 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.\n(B)\nQualified agri-biodiesel production\nFor purposes of this paragraph, the term \u201cqualified agri-biodiesel production\u201d means any agri-biodiesel which is produced by an eligible small agri-biodiesel producer in a manner which complies with the requirements under section 45Z(f)(1)(A)(iii), and which during the taxable year\u2014\n(i) is sold by such producer to another person\u2014\n(I) for use by such other person in the production of a qualified biodiesel mixture in such other person\u2019s trade or business (other than casual off-farm production),\n(II) for use by such other person as a fuel in a trade or business, or\n(III) who sells such agri-biodiesel at retail to another person and places such agri-biodiesel in the fuel tank of such other person, or\n(ii) is used or sold by such producer for any purpose described in clause (i).\n(C)\nLimitation\nThe qualified agri-biodiesel production of any producer for any taxable year shall not exceed 15,000,000 gallons.\n(D)\nCoordination with clean fuel production credit\nThe credit determined under this paragraph with respect to any gallon of fuel shall be in addition to any credit determined under section 45Z with respect to such gallon of fuel.\n(c)\nCoordination with credit against excise tax\nThe amount of the credit determined under this section with respect to any biodiesel shall be properly reduced to take into account any benefit provided with respect to such biodiesel solely by reason of the application of section 6426 or 6427(e).\n(d)\nDefinitions and special rules\nFor purposes of this section\u2014\n(1)\nBiodiesel\nThe term \u201cbiodiesel\u201d means the monoalkyl esters of long chain fatty acids derived from plant or animal matter which meet\u2014\n(A) the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (\n42 U.S.C. 7545\n(B) the requirements of the American Society of Testing and Materials D6751.\nSuch term shall not include any liquid with respect to which a credit may be determined under section 40 or 40B.\n(2)\nAgri-biodiesel\nThe term \u201cagri-biodiesel\u201d means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds, and camelina, and from animal fats.\n(3)\nMixture or biodiesel not used as a fuel, etc.\n(A)\nMixtures\nIf\u2014\n(i) any credit was determined under this section with respect to biodiesel used in the production of any qualified biodiesel mixture, and\n(ii) any person\u2014\n(I) separates the biodiesel from the mixture, or\n(II) without separation, uses the mixture other than as a fuel,\nthen there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(1)(A) and the number of gallons of such biodiesel in such mixture.\n(B)\nBiodiesel\nIf\u2014\n(i) any credit was determined under this section with respect to the retail sale of any biodiesel, and\n(ii) any person mixes such biodiesel or uses such biodiesel other than as a fuel,\nthen there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(2)(A) and the number of gallons of such biodiesel.\n(C)\nProducer credit\nIf\u2014\n(i) any credit was determined under subsection (a)(3), and\n(ii) any person does not use such fuel for a purpose described in subsection (b)(4)(B),\nthen there is hereby imposed on such person a tax equal to 10 cents a gallon for each gallon of such agri-biodiesel.\n(D)\nApplicable laws\nAll provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under subparagraph (A) or (B) as if such tax were imposed by section 4081 and not by this chapter.\n(4)\nPass-thru in the case of estates and trusts\nUnder regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.\n(5)\nLimitation to biodiesel with connection to the United States\nNo credit shall be determined under this section with respect to any biodiesel which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term \u201cUnited States\u201d includes any possession of the United States.\n(e)\nDefinitions and special rules for small agri-biodiesel producer credit\nFor purposes of this section\u2014\n(1)\nEligible small agri-biodiesel producer\nThe term \u201celigible small agri-biodiesel producer\u201d means a person who, at all times during the taxable year, has a productive capacity for agri-biodiesel not in excess of 60,000,000 gallons.\n(2)\nAggregation rule\nFor purposes of the 15,000,000 gallon limitation under subsection (b)(4)(C) and the 60,000,000 gallon limitation under paragraph (1), all members of the same controlled group of corporations (within the meaning of section 267(f)) and all persons under common control (within the meaning of section 52(b) but determined by treating an interest of more than 50 percent as a controlling interest) shall be treated as 1 person.\n(3)\nPartnership, S corporation, and other pass-thru entities\nIn the case of a partnership, trust, S corporation, or other pass-thru entity, the limitations contained in subsection (b)(4)(C) and paragraph (1) shall be applied at the entity level and at the partner or similar level.\n(4)\nAllocation\nFor purposes of this subsection, in the case of a facility in which more than 1 person has an interest, productive capacity shall be allocated among such persons in such manner as the Secretary may prescribe.\n(5)\nRegulations\nThe Secretary may prescribe such regulations as may be necessary\u2014\n(A) to prevent the credit provided for in subsection (a)(3) from directly or indirectly benefiting any person with a direct or indirect productive capacity of more than 60,000,000 gallons of agri-biodiesel during the taxable year, or\n(B) to prevent any person from directly or indirectly benefiting with respect to more than 15,000,000 gallons during the taxable year.\n(6)\nAllocation of small agri-biodiesel credit to patrons of cooperative\n(A)\nElection to allocate\n(i)\nIn general\nIn the case of a cooperative organization described in section 1381(a), any portion of the credit determined under subsection (a)(3) for the taxable year may, at the election of the organization, be apportioned pro rata among patrons of the organization on the basis of the quantity or value of business done with or for such patrons for the taxable year.\n(ii)\nForm and effect of election\nAn election under clause (i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year. Such election shall not take effect unless the organization designates the apportionment as such in a written notice mailed to its patrons during the payment period described in section 1382(d).\n(B)\nTreatment of organizations and patrons\n(i)\nOrganizations\nThe amount of the credit not apportioned to patrons pursuant to subparagraph (A) shall be included in the amount determined under subsection (a)(3) for the taxable year of the organization.\n(ii)\nPatrons\nThe amount of the credit apportioned to patrons pursuant to subparagraph (A) shall be included in the amount determined under such subsection for the first taxable year of each patron ending on or after the last day of the payment period (as defined in section 1382(d)) for the taxable year of the organization or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from the cooperative of the apportionment.\n(iii)\nSpecial rules for decrease in credits for taxable year\nIf the amount of the credit of the organization determined under such subsection for a taxable year is less than the amount of such credit shown on the return of the organization for such year, an amount equal to the excess of\u2014\n(I) such reduction, over\n(II) the amount not apportioned to such patrons under subparagraph (A) for the taxable year,\nshall be treated as an increase in tax imposed by this chapter on the organization. Such increase shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.\n(f)\nRenewable diesel\nFor purposes of this title\u2014\n(1)\nTreatment in the same manner as biodiesel\nExcept as provided in paragraph (2), renewable diesel shall be treated in the same manner as biodiesel.\n(2)\nException\nSubsection (b)(4) shall not apply with respect to renewable diesel.\n(3)\nRenewable diesel defined\nThe term \u201crenewable diesel\u201d means liquid fuel derived from biomass which meets\u2014\n(A) the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (\n42 U.S.C. 7545\n(B) the requirements of the American Society of Testing and Materials D975 or D396, or other equivalent standard approved by the Secretary.\nSuch term shall not include any liquid with respect to which a credit may be determined under section 40. Such term does not include any fuel derived from coprocessing biomass with a feedstock which is not biomass. For purposes of this paragraph, the term \u201cbiomass\u201d has the meaning given such term by section 45K(c)(3).\n(g)\nTermination\nThis section shall not apply to any sale or use after\nDecember 31, 2024\nDecember 31, 2026","url":"https://projectusc.org/usc/t26/s40A.html","content":[{"t":"sec","id":"/us/usc/t26/s40A","children":[{"t":"num","text":"\u00a7\u202f40A."},{"t":"heading","text":"Biodiesel and renewable diesel used as fuel"},{"t":"subsec","id":"/us/usc/t26/s40A/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"General rule"},{"t":"chapeau","text":"For purposes of section 38, the biodiesel fuels credit determined under this section for the taxable year is an amount equal to the sum of\u2014"},{"t":"para","id":"/us/usc/t26/s40A/a/1","children":[{"t":"num","text":"(1)"},{"t":"content","text":" the biodiesel mixture credit, plus","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/a/2","children":[{"t":"num","text":"(2)"},{"t":"content","text":" the biodiesel credit, plus","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/a/3","children":[{"t":"num","text":"(3)"},{"t":"content","text":" in the case of an eligible small agri-biodiesel producer, the small agri-biodiesel producer credit.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s40A/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"Definition of biodiesel mixture credit, biodiesel credit, and small agri-biodiesel producer credit"},{"t":"chapeau","text":"For purposes of this section\u2014"},{"t":"para","id":"/us/usc/t26/s40A/b/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Biodiesel mixture credit"},{"t":"subpara","id":"/us/usc/t26/s40A/b/1/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"The 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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/b/1/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Qualified biodiesel mixture"},{"t":"chapeau","text":"The term \u201cqualified biodiesel mixture\u201d means a mixture of biodiesel and diesel fuel (as defined in section 4083(a)(3)), determined without regard to any use of kerosene, which\u2014"},{"t":"clause","id":"/us/usc/t26/s40A/b/1/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" is sold by the taxpayer producing such mixture to any person for use as a fuel, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s40A/b/1/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" is used as a fuel by the taxpayer producing such mixture.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/b/1/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Sale or use must be in trade or business, etc."},{"t":"chapeau","text":"Biodiesel used in the production of a qualified biodiesel mixture shall be taken into account\u2014"},{"t":"clause","id":"/us/usc/t26/s40A/b/1/C/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" only if the sale or use described in subparagraph (B) is in a trade or business of the taxpayer, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s40A/b/1/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" for the taxable year in which such sale or use occurs.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/b/1/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Casual off-farm production not eligible"},{"t":"content","children":[{"t":"p","text":"No credit shall be allowed under this section with respect to any casual off-farm production of a qualified biodiesel mixture.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/b/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Biodiesel credit"},{"t":"subpara","id":"/us/usc/t26/s40A/b/2/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The 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\u2014"},{"t":"clause","id":"/us/usc/t26/s40A/b/2/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" is used by the taxpayer as a fuel in a trade or business, or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s40A/b/2/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" is sold by the taxpayer at retail to a person and placed in the fuel tank of such person\u2019s vehicle.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/b/2/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"User credit not to apply to biodiesel sold at retail"},{"t":"content","children":[{"t":"p","text":"No 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).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/b/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Certification for biodiesel"},{"t":"content","children":[{"t":"p","text":"No 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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/b/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Small agri-biodiesel producer credit"},{"t":"subpara","id":"/us/usc/t26/s40A/b/4/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"The 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.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/b/4/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Qualified agri-biodiesel production"},{"t":"chapeau","text":"For purposes of this paragraph, the term \u201cqualified agri-biodiesel production\u201d means any agri-biodiesel which is produced by an eligible small agri-biodiesel producer in a manner which complies with the requirements under section 45Z(f)(1)(A)(iii), and which during the taxable year\u2014"},{"t":"clause","id":"/us/usc/t26/s40A/b/4/B/i","children":[{"t":"num","text":"(i)"},{"t":"chapeau","text":" is sold by such producer to another person\u2014"},{"t":"subclause","id":"/us/usc/t26/s40A/b/4/B/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" for use by such other person in the production of a qualified biodiesel mixture in such other person\u2019s trade or business (other than casual off-farm production),","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s40A/b/4/B/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" for use by such other person as a fuel in a trade or business, or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s40A/b/4/B/i/III","children":[{"t":"num","text":"(III)"},{"t":"content","text":" who sells such agri-biodiesel at retail to another person and places such agri-biodiesel in the fuel tank of such other person, or","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s40A/b/4/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" is used or sold by such producer for any purpose described in clause (i).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/b/4/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Limitation"},{"t":"content","children":[{"t":"p","text":"The qualified agri-biodiesel production of any producer for any taxable year shall not exceed 15,000,000 gallons.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/b/4/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Coordination with clean fuel production credit"},{"t":"content","children":[{"t":"p","text":"The credit determined under this paragraph with respect to any gallon of fuel shall be in addition to any credit determined under section 45Z with respect to such gallon of fuel.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s40A/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"Coordination with credit against excise tax"},{"t":"content","children":[{"t":"p","text":"The amount of the credit determined under this section with respect to any biodiesel shall be properly reduced to take into account any benefit provided with respect to such biodiesel solely by reason of the application of section 6426 or 6427(e).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s40A/d","children":[{"t":"num","text":"(d)"},{"t":"heading","text":"Definitions and special rules"},{"t":"chapeau","text":"For purposes of this section\u2014"},{"t":"para","id":"/us/usc/t26/s40A/d/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Biodiesel"},{"t":"chapeau","text":"The term \u201cbiodiesel\u201d means the monoalkyl esters of long chain fatty acids derived from plant or animal matter which meet\u2014"},{"t":"subpara","id":"/us/usc/t26/s40A/d/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (","children":[{"t":"ref","text":"42 U.S.C. 7545","href":"/us/usc/t42/s7545","tail":"), and"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/d/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the requirements of the American Society of Testing and Materials D6751.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"Such term shall not include any liquid with respect to which a credit may be determined under section 40 or 40B.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/d/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Agri-biodiesel"},{"t":"content","children":[{"t":"p","text":"The term \u201cagri-biodiesel\u201d means biodiesel derived solely from virgin oils, including esters derived from virgin vegetable oils from corn, soybeans, sunflower seeds, cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, rice bran, mustard seeds, and camelina, and from animal fats.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/d/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Mixture or biodiesel not used as a fuel, etc."},{"t":"subpara","id":"/us/usc/t26/s40A/d/3/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Mixtures"},{"t":"chapeau","text":"If\u2014"},{"t":"clause","id":"/us/usc/t26/s40A/d/3/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" any credit was determined under this section with respect to biodiesel used in the production of any qualified biodiesel mixture, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s40A/d/3/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" any person\u2014"},{"t":"subclause","id":"/us/usc/t26/s40A/d/3/A/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" separates the biodiesel from the mixture, or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s40A/d/3/A/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" without separation, uses the mixture other than as a fuel,","tail":"\n"}],"tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"then there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(1)(A) and the number of gallons of such biodiesel in such mixture.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/d/3/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Biodiesel"},{"t":"chapeau","text":"If\u2014"},{"t":"clause","id":"/us/usc/t26/s40A/d/3/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" any credit was determined under this section with respect to the retail sale of any biodiesel, and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s40A/d/3/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" any person mixes such biodiesel or uses such biodiesel other than as a fuel,","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"then there is hereby imposed on such person a tax equal to the product of the rate applicable under subsection (b)(2)(A) and the number of gallons of such biodiesel.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/d/3/C","children":[{"t":"num","text":"(C)"},{"t":"heading","text":"Producer credit"},{"t":"chapeau","text":"If\u2014"},{"t":"clause","id":"/us/usc/t26/s40A/d/3/C/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" any credit was determined under subsection (a)(3), and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s40A/d/3/C/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" any person does not use such fuel for a purpose described in subsection (b)(4)(B),","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"then there is hereby imposed on such person a tax equal to 10 cents a gallon for each gallon of such agri-biodiesel.","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/d/3/D","children":[{"t":"num","text":"(D)"},{"t":"heading","text":"Applicable laws"},{"t":"content","children":[{"t":"p","text":"All provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under subparagraph (A) or (B) as if such tax were imposed by section 4081 and not by this chapter.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/d/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Pass-thru in the case of estates and trusts"},{"t":"content","children":[{"t":"p","text":"Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/d/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Limitation to biodiesel with connection to the United States"},{"t":"content","children":[{"t":"p","text":"No credit shall be determined under this section with respect to any biodiesel which is produced outside the United States for use as a fuel outside the United States. For purposes of this paragraph, the term \u201cUnited States\u201d includes any possession of the United States.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s40A/e","children":[{"t":"num","text":"(e)"},{"t":"heading","text":"Definitions and special rules for small agri-biodiesel producer credit"},{"t":"chapeau","text":"For purposes of this section\u2014"},{"t":"para","id":"/us/usc/t26/s40A/e/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Eligible small agri-biodiesel producer"},{"t":"content","children":[{"t":"p","text":"The term \u201celigible small agri-biodiesel producer\u201d means a person who, at all times during the taxable year, has a productive capacity for agri-biodiesel not in excess of 60,000,000 gallons.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/e/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Aggregation rule"},{"t":"content","children":[{"t":"p","text":"For purposes of the 15,000,000 gallon limitation under subsection (b)(4)(C) and the 60,000,000 gallon limitation under paragraph (1), all members of the same controlled group of corporations (within the meaning of section 267(f)) and all persons under common control (within the meaning of section 52(b) but determined by treating an interest of more than 50 percent as a controlling interest) shall be treated as 1 person.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/e/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Partnership, S corporation, and other pass-thru entities"},{"t":"content","children":[{"t":"p","text":"In the case of a partnership, trust, S corporation, or other pass-thru entity, the limitations contained in subsection (b)(4)(C) and paragraph (1) shall be applied at the entity level and at the partner or similar level.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/e/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Allocation"},{"t":"content","children":[{"t":"p","text":"For purposes of this subsection, in the case of a facility in which more than 1 person has an interest, productive capacity shall be allocated among such persons in such manner as the Secretary may prescribe.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/e/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Regulations"},{"t":"chapeau","text":"The Secretary may prescribe such regulations as may be necessary\u2014"},{"t":"subpara","id":"/us/usc/t26/s40A/e/5/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" to prevent the credit provided for in subsection (a)(3) from directly or indirectly benefiting any person with a direct or indirect productive capacity of more than 60,000,000 gallons of agri-biodiesel during the taxable year, or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/e/5/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" to prevent any person from directly or indirectly benefiting with respect to more than 15,000,000 gallons during the taxable year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/e/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"Allocation of small agri-biodiesel credit to patrons of cooperative"},{"t":"subpara","id":"/us/usc/t26/s40A/e/6/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"Election to allocate"},{"t":"clause","id":"/us/usc/t26/s40A/e/6/A/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"In the case of a cooperative organization described in section 1381(a), any portion of the credit determined under subsection (a)(3) for the taxable year may, at the election of the organization, be apportioned pro rata among patrons of the organization on the basis of the quantity or value of business done with or for such patrons for the taxable year.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s40A/e/6/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Form and effect of election"},{"t":"content","children":[{"t":"p","text":"An election under clause (i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year. Such election shall not take effect unless the organization designates the apportionment as such in a written notice mailed to its patrons during the payment period described in section 1382(d).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/e/6/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Treatment of organizations and patrons"},{"t":"clause","id":"/us/usc/t26/s40A/e/6/B/i","children":[{"t":"num","text":"(i)"},{"t":"heading","text":"Organizations"},{"t":"content","children":[{"t":"p","text":"The amount of the credit not apportioned to patrons pursuant to subparagraph (A) shall be included in the amount determined under subsection (a)(3) for the taxable year of the organization.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s40A/e/6/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"heading","text":"Patrons"},{"t":"content","children":[{"t":"p","text":"The amount of the credit apportioned to patrons pursuant to subparagraph (A) shall be included in the amount determined under such subsection for the first taxable year of each patron ending on or after the last day of the payment period (as defined in section 1382(d)) for the taxable year of the organization or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from the cooperative of the apportionment.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t26/s40A/e/6/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"heading","text":"Special rules for decrease in credits for taxable year"},{"t":"chapeau","text":"If the amount of the credit of the organization determined under such subsection for a taxable year is less than the amount of such credit shown on the return of the organization for such year, an amount equal to the excess of\u2014"},{"t":"subclause","id":"/us/usc/t26/s40A/e/6/B/iii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" such reduction, over","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t26/s40A/e/6/B/iii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" the amount not apportioned to such patrons under subparagraph (A) for the taxable year,","tail":"\n"}],"tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"\u2001shall be treated as an increase in tax imposed by this chapter on the organization. Such increase shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s40A/f","children":[{"t":"num","text":"(f)"},{"t":"heading","text":"Renewable diesel"},{"t":"chapeau","text":"For purposes of this title\u2014"},{"t":"para","id":"/us/usc/t26/s40A/f/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Treatment in the same manner as biodiesel"},{"t":"content","children":[{"t":"p","text":"Except as provided in paragraph (2), renewable diesel shall be treated in the same manner as biodiesel.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/f/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Exception"},{"t":"content","children":[{"t":"p","text":"Subsection (b)(4) shall not apply with respect to renewable diesel.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s40A/f/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Renewable diesel defined"},{"t":"chapeau","text":"The term \u201crenewable diesel\u201d means liquid fuel derived from biomass which meets\u2014"},{"t":"subpara","id":"/us/usc/t26/s40A/f/3/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the registration requirements for fuels and fuel additives established by the Environmental Protection Agency under section 211 of the Clean Air Act (","children":[{"t":"ref","text":"42 U.S.C. 7545","href":"/us/usc/t42/s7545","tail":"), and"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s40A/f/3/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the requirements of the American Society of Testing and Materials D975 or D396, or other equivalent standard approved by the Secretary.","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"Such term shall not include any liquid with respect to which a credit may be determined under section 40. Such term does not include any fuel derived from coprocessing biomass with a feedstock which is not biomass. For purposes of this paragraph, the term \u201cbiomass\u201d has the meaning given such term by section 45K(c)(3).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s40A/g","children":[{"t":"num","text":"(g)"},{"t":"heading","text":"Termination"},{"t":"content","children":[{"t":"p","text":"This section shall not apply to any sale or use after ","children":[{"t":"text","text":"December 31, 2024","tail":" (or, in the case of the small agri-biodiesel producer credit, any sale or use after "},{"t":"text","text":"December 31, 2026","tail":")."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}