NBB In Sight

We've Got the Tax Incentive Now What?
By Joseph Jobe | April 01, 2005
April 15 is tax day as if you needed one more reminder. Unless you're one of the lucky ones who has learned that procrastination has painful consequences, you may be joining millions of other Americans who wait until the last minute to do their taxes.

Lately, my life has been consumed by tax law, tax code and tax forms and it has nothing to do with the Jobe family 1040 form. Rather, it is in guiding the biodiesel federal excise tax credit regulations into place and maximizing their impact for the growth of the industry. Although great progress has been made (the forms for the blender credit are now available at www.biodiesel.org), the process of working with the Internal Revenue Service for final regulations is ongoing.

It is during this process of implementation that we begin our next great task: seeking an extension. As I have been traveling around the nation during the past few months talking to biodiesel stakeholders, a lot of people have asked why the new tax credit for biodiesel only lasts two years. They ask, how could a production facility get financing and start operations on a two-year program when they can't even get a plant built in that amount of time? Or barely get a plant built, only to have the extension expire?

My answer to them is that the industry's intention has always been that this would run much longer than two years. But our supporters in
Washington, D.C., told us that two years is what we could expect initially, and that it could be followed by an effort to seek an extension. That advice has become our course of action. Although nobody can be certain about the prospects of future legislation, one certainty is certain is that getting the tax credit extended is now our No. 1 priority.

What we accomplished last fall was a real triumph. Most people are not aware of how difficult it is to change the United States tax code. We were successful in doing so within three years of our first attempt-a sprint by most standards. Even when the energy bill failed two years in a row, our leaders and champions found another bill to attach the legislation to and drove it home.

In some ways, it is good that the process of changing the tax code is so difficult. The establishment of the biodiesel incentive was a great success for America. Now that the tax credit has been established, it will take a similar amount of hard work, communication and support from all stakeholders to make it a long-term investment in helping biodiesel succeed-and start making a dent in our dependence on foreign oil.

I believe that we will ultimately be successful. But stakeholders considering investing in a biodiesel plant should not bank on my conviction alone. Rather, they must all rise to the challenge and talk to their Congressional delegates. If you are a biodiesel supporter, we look to you to do the same. Please ask your senators and representatives to support an extension bill; explain how important it is to you as a constituent and to the future of the nation. It will take everyone working together to get this done.

The market will decide who should invest in a biodiesel plant and where. It is the National Biodiesel Board's to challenge everyone who is a biodiesel supporter to make sure that our No. 1 priority is achieved.

The result will be a sustainable, successful biodiesel market that will help our country down the vital path to where energy independence is almost as certain as Uncle Sam collecting our taxes on April 15.

Joseph Jobe
National Biodiesel Board
Executive Director
 
 
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