Ethanol Groups Working to Replace VEETC with New Tax Credit

Wisconsin Ag Connection - 03/23/2011

Ethanol-related trade groups have shared a plan with federal lawmakers that would phase down the ethanol tax incentive after three years and replace it with a variable tax credit, which would be tied to the price of oil.

According to the Wisconsin Bio Industry Alliance, the proposal comes as representatives from biofuel groups are meeting this week with the USDA to discuss their industry's next steps. An increasing number of legislators are calling for the Volumetric Ethanol Excise Tax Credit to end, citing the need to reduce government spending.

As part of the proposal, ethanol industry groups have agreed to phase down the current 45 cents per gallon ethanol tax credit over three years and replace it beginning in the fourth year with a variable blenders' tax credit tied to the price of oil.

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