Illinois proposes to phase out biodiesel sales tax exemption

Illinois Gov. J.B. Pritzker on Feb. 17 proposed to accelerate the expiration of remaining sales tax exemptions for biodiesel as part of his fiscal year 2022 budget proposal. The Illinois Soybean Growers Association is speaking out against the proposal.

Information released by Pritzker states that accelerating the expiration of the sales tax exemptions for biodiesel will increase the state general funds revenues by an estimated $107 million.

According to the ISA, Illinois uses 180 million gallons of biodiesel each year, returning an estimated value of $600 million to the state’s family farms annually. Since 2003, Illinois has been using B11 and higher biodiesel blends, supported by the exemption of those fuels from state sales tax.

“As a farmer who understands that there are markets around the world for my crop, I am always reminded of the value that biodiesel has right here at home,” said Doug Schroeder, ISG chairman and a soybean farmer from Mahomet, Illinois. “Biodiesel adds value to my farm, my community, and my state. This last year and COVID-19 have put extra attention on air quality for all Illinoisans. Sustaining our use of B11 at a minimum and moving to B20 and higher biodiesel blends helps in promoting an Illinois product, all while reducing our dependence on fossil fuels. I look forward to continuing the conversation, and working with all partners to use more biodiesel to improve our economy and public health.”

The ISG is also speaking out in support of HB299, a bill introduced in the Illinois legislature in January that aims to create a state renewable fuels standard. The legislation would require a B5 blend of from July 1, 2021 through July 1, 2024, when the requirement would increase to B20.

The ISG said it commits to continued discussion with Pritzker and cleaner fuels advocates to reconcile the proposals in a way that enhances the use of biodiesel in Illinois for air quality outcomes.