Maryland E85 Laws and Incentives
State Incentives
Cellulosic Ethanol Research and Development Tax Credit
An individual or corporation may claim a credit against the state income tax of up to 10% for qualified research and development expenses for cellulosic ethanol technology. The total amount of approved credits may not exceed $250,000 in a single calendar year. If the credit allowed exceeds the tax liability of the individual or corporation for that taxable year, the credit may be applied to future taxable years until the credit is exhausted or for up to 15 taxable years after the qualified expenses were incurred, whichever occurs first. (Reference House Bill 140, 2008)
Biofuels Production Credits
Under the Renewable Fuels Promotion Act of 2005, qualified ethanol and biodiesel producers are eligible for ethanol and biodiesel production credits. To be eligible for the credits, the producer must first apply to the Renewable Fuels Incentive Board (Board) and receive certification as a producer. Credits may be offered to certified producers in Maryland for ethanol or biodiesel produced on or after December 31, 2007. The Board may not pay a credit for ethanol or biodiesel produced after December 31, 2017.
Ethanol production credits are as follows: a) $0.20 per gallon of ethanol produced from small grains such as wheat, rye, triticale, oats, and hulled or hull-less barley; and b) $0.05 per gallon of ethanol produced from other agricultural products. The Board may not certify ethanol production credits for more than a total of 15 million gallons per calendar year, of which at least 10 million gallons must be produced from small grains.
Biodiesel production credits are as follows: a) $0.20 per gallon of biodiesel produced from soybean oil (the soybean oil must be produced in a facility or through expanded capacity of a facility that began operating after December 31, 2004), and b) $0.05 per gallon for biodiesel produced from other feedstocks, including soybean oil produced in a facility that began operating on or before December 31, 2004. The Board may not certify biodiesel production credits for more than a total of five million gallons per calendar year, of which at least two million gallons must be from soybean oil produced in a facility as described above.
(Reference Maryland Statutes, Agriculture Code 10-1501 through 10-1507)
State Laws and Regulations
Biofuels Promotion
Among other duties, the Incentives for Agriculture Task Force is responsible for reviewing and evaluating the overall state tax structure as it impacts agriculture and the feasibility of modifications or alternatives to the current structure that would enhance the profitability of farming. This includes recommendations regarding the creation of tax credits or exemptions applicable to the production of ethanol, biodiesel, or other bio-energy alternatives. (Reference Maryland Statutes, State Finance and Procurement Code 5-408)
Alternative Fuel Vehicle (AFV) Acquisition Requirements
Maryland established an AFV goal under the plan for 'Sustaining Maryland's Future with Clean Power, Green Buildings and Energy Efficiency.' The state will revise fleet policy and purchasing guidelines to offer more flexibility in purchasing, where practical, low emission vehicles and AFVs for its fleet. The state must ensure that an average of 50% of the fuel used to operate bi-fuel and flexible fuel vehicles are alternative fuel. The state must also help develop the refueling and maintenance infrastructure required to make using certain types of AFV use practical. The state may provide technical assistance and other incentives to use clean technology, where practical, in state transit fleets. (Reference Executive Order 01.01.2001.02)
