Biodiesel Retailer and Distributor Tax Credit (Section 135.775)

Purpose

The Biodiesel Retailer and Distributor Tax Credit offers an income tax credit against Missouri state income tax liability to any retail dealer that sells a biodiesel blend at a retail service station, or to any distributor that sells a biodiesel blend directly to the final user in this state (Section 135.775). (See definitions below.)

Administering Agency

Missouri Department of Revenue

Credit Effective Date

This credit applies to all tax years beginning on or after January 1, 2023. If a taxpayer’s fiscal year begins before January 1, 2023, but ends during the 2023 calendar year, the taxpayer may claim the credit for the amount of higher ethanol blend sold between January 1, 2023, and the end of the tax year.

Eligible Applicants

Distributor – A person, firm, or corporation doing business in Missouri that produces, refines, blends, compounds, or manufactures motor fuel; imports motor fuel into the state; or is engaged in distribution of motor fuel that sells higher ethanol blend directly to the final user located in this state.

Retail dealer - A person firm or corporation doing business in Missouri that owns or operates a retail service station in Missouri that sells higher ethanol blend at such retail dealer's retail service station.

Qualifying Biodiesel

Biodiesel blend – A blend of diesel fuel and biodiesel fuel of at least five percent and not more than twenty percent for on-road and off-road diesel-fueled vehicle use.

Biodiesel fuel – A renewable, biodegradable, mono alkyl ester combustible liquid fuel that is derived from agricultural and other plant oils or animal fats and that meets the most recent version of the ASTM International D6751 Standard Specification for Biodiesel Fuel Blend Stock. A fuel shall be deemed to be biodiesel fuel if the fuel consists of a pure B100 or B99 ratio. Biodiesel produced from palm oil is not biodiesel fuel for the purposes of this section unless the palm oil is contained within waste oil and grease collected within the United States.

B99 – A blend of ninety-nine percent biodiesel fuel that meets the most recent version of the ASTM International D6751 Standard Specification for Biodiesel Fuel Blend Stock with a minimum of one-tenth of one percent and maximum of one percent diesel fuel that meets the most recent version of the ASTM International D975 Standard Specification for Diesel Fuel;

How the Program Works

An eligible retail dealer that sells biodiesel blends at a retail service station, or a distributor that sells biodiesel blends directly to the final user in Missouri, may claim the tax credit by completing Form 5879 to calculate the credit amount. The credit amount is:

• Two cents per gallon of biodiesel blend of at least five percent but not more than ten percent sold by the retail dealer at a retail service station or by a distributor directly to the final user located in this state during the tax year for which the tax credit is claimed; and
• Five cents per gallon of biodiesel blend in excess of ten percent but not more than twenty percent sold by the retail dealer at a retail service station or by a distributor directly to the final user located in this state during the tax year for which the tax credit is claimed.

Eligible Use of the Tax Credit

The Biodiesel Retailer and Distributor Tax Credit may be applied to income tax liability imposed by Chapter 143, RSMo, excluding withholding tax imposed by Sections 143.191 to 143.265. The credit is applied after all other allowable credits.

If the amount of the credit exceeds the taxpayer’s income tax liability, the excess will be refunded.

The credit cannot be transferred, sold, or assigned.

Pass-through entities must claim the credit at the entity level. The credit may not be assigned or passed through to partners, shareholders, or members.

Funding Limits and Apportionment

The total amount of credits redeemed by all taxpayers in any fiscal year may not exceed $16,000,000.

If claims exceed the limit, credits will be apportioned on an equal ratio amount eligible claimants.

If April 15 falls on a Saturday, Sunday, or legal holiday, claims filed on the next business day will be considered timely.

Section 135.775, RSMo, does not provide provisions to waiver interest, penalties, or additions resulting from apportionment.

If your return would result in a balance due without applying the credit, you may wish to pay the amount due by the return’s due date to avoid interest and applicable additions or penalties. After apportionment, any overpayment exceeding $1 and not owed to the Department may be refunded.

If your return would result in a refund before applying the credit, the Department will issue a partial refund for the amount that exceeds the claimed credit. After apportionment, any remaining refundable amount will be issued separately.

If your credit amount is reduced through apportionment, you may file an amended return with Form 5879 and Form MO‑TC on or after July 1 to be considered for the following fiscal year. Amended returns may be filed until the credit has been fully redeemed or the statute of limitations for refunds expires (generally three years from the original due date).

How to Claim the Credit

To claim the Biodiesel Retailer and Distributor Tax Credit:

• Complete and sign Form 5879.
• Submit Form 5879 and Form MO-TC with your Missouri income tax return (Form MO-1040, Form MO-1120, and Form MO-PTE).
• Mail the forms to: Missouri Department of Revenue, P.O. Box 27, Jefferson City, MO 65105 or email to: taxcredit@dor.mo.gov.

For pass-through entities that file Form MO-1065 or Form MO-1120S and do not file Form MO-PTE:

• Complete and sign Form 5879.
• Submit Form 5879 and Form MO-TC with the Form MO-1065 or Form MO-1120S.
• These filings will constitute a claim for refund of the credit
• Mail the forms to: Missouri Department of Revenue, P.O. Box 27, Jefferson City, MO 65105 or email to: taxcredit@dor.mo.gov.

Authorization

The credit sunsets December 31, 2028, and fully terminations September 1, 2029.

Forms Required

• Form MO-TC, Miscellaneous Tax Credits
• Form 5879 - Biodiesel Retailer and Distributor Tax Credit

Contact Information

• Email: taxcredit@dor.mo.gov
• Phone: 573-751-3220
• Mail: Missouri Department of Revenue, Taxation Division, P.O. Box 27, Jefferson City, MO 65101

Definitions

Biodiesel blend, a blend of diesel fuel and biodiesel fuel of at least five percent and not more than twenty percent for on-road and off-road diesel-fueled vehicle use;

Biodiesel fuel, a renewable, biodegradable, mono alkyl ester combustible liquid fuel that is derived from agricultural and other plant oils or animal fats and that meets the most recent version of the ASTM International D6751 Standard Specification for Biodiesel Fuel Blend Stock. A fuel shall be deemed to be biodiesel fuel if the fuel consists of a pure B100 or B99 ratio. Biodiesel produced from palm oil is not biodiesel fuel for the purposes of this section unless the palm oil is contained within waste oil and grease collected within the United States;

B99, a blend of ninety-nine percent biodiesel fuel that meets the most recent version of the ASTM International D6751 Standard Specification for Biodiesel Fuel Blend Stock with a minimum of one-tenth of one percent and maximum of one percent diesel fuel that meets the most recent version of the ASTM International D975 Standard Specification for Diesel Fuel;

Distributor, a person, firm, or corporation doing business in this state that:

Retail dealer, a person, firm, or corporation doing business in this state that owns or operates a retail service station in this state;

Retail service station, a location in this state from which biodiesel blend is sold to the general public and is dispensed directly into motor vehicle fuel tanks for consumption at retail.