Biodiesel made from soybeans supports our economy and minimizes our impact on the environment. It also comes with a smaller tax bill.
Illinois Biodiesel Tax Incentive
Illinois enacted a sales tax incentive for the use of biodiesel blends in 2003. Due to its success, the tax exemption was extended in 2011 to run through 2018. This important legislation continues to support Illinois soybean growers and biodiesel producers alike as it helps expand the market for this cleaner burning, renewable fuel. According to a 2011 study from the National Biodiesel Board, 1,500 Illinois jobs are supported by this sales tax incentive. Also included in the study, biodiesel production companies cited the incentive as a major reason to do business in Illinois.
The biodiesel tax incentive works at two levels:
- A partial sales tax exemption of 20 percent (of the state's 6.25 percent) is applicable for biodiesel blends of one to 10 percent, also known as B1 to B10.
- A full exemption for the state's entire 6.25 percent sales tax is provided for blends of 11 percent or more (B11, B20, B100, etc.)
Due to the financial advantage of selling higher blends of biodiesel, most retail fuel outlets in Illinois sell B11. In turn, these savings have lead Illinois to become the country's leading consumer of this alternative fuel.