Notes and Sources

14. Energy Information Administration, Annual Energy Outlook 2007, DOE-EIA-0383(2007) (Washington, DC, February 2007), “Legislation and Regulations: Excise Taxes on Highway Fuels,” p. 25, web site www. eia.doe.gov/oiaf/archive/aeo07.

15. U.S. Department of the Treasury, Internal Revenue Service, Excise Taxes for 2007, Publication 510 (1/2007) (Washington, DC, Revised January 2007), web site www.irs.gov/publications/p510.

16. Defense Energy Support Center, “Compilation of United States Fuel Taxes, Inspection Fees, and Environmental Taxes and Fees” (June 29, 2007).

17. U.S. Department of Energy, Energy Efficiency and Renewable Energy, Alternative Fuels & Advanced Vehicles Data Center, “Volumetric Ethanol Excise Tax Credit (VEETC),” web site www.eere.energy.gov/afdc/ progs/view_ind_fed.php/afdc/399/0.

18. E85 is a fuel containing a blend of 70 to 85 percent ethanol and 30 to 15 percent gasoline by volume.

19. VEETC was established by the American Jobs Creation Act of 2004, Section 301. Before VEETC, gasoline blended with 5.7 percent, 7.7 percent, or 10 percent ethanol received an excise tax reduction equivalent to 51 cents per gallon of ethanol; however, the applicable excise tax reduction for blends with any other ethanol percentage was equivalent to less than 51 cents per gallon of ethanol. This was an especially serious impediment to blenders of E85.

20. VEETC provided biodiesel tax credits for 2005 and 2006. EPACT2005, Section 1344, extended the biodiesel tax credits through 2007 and 2008.

21. The Food, Conservation, and Energy Act of 2008 (Public Law 110-234), which was enacted in May 2008, contains several tax provisions related to biofuels. The bill reduces the ethanol blending tax credit from 51 cents to 45 cents per gallon once annual ethanol production or import volumes reach 7.5 billion gallons; extends the ethanol import tariff through 2010; and establishes a tax credit for cellulosic biofuels of up to $1.01 per gallon produced. The AEO2008 reference case projects ethanol production of 8.5 billion gallons in 2008, which would trigger the blending tax credit reduction in 2009. AEO2008 does not include consideration of the Food, Conservation, and Energy Act of 2008, which was enacted too late for inclusion.

22. EPACT2005, Section 1347, increased the production volume for small producers from 30 million to 60 million gallons, starting in 2006.