§ 15-4-2803 - Tax credit for biodiesel suppliers. - Arkansas Statutes

15-4-2803. Tax credit for biodiesel suppliers.

(a) There shall be allowed a credit against the income tax imposed by the Income Tax Act of 1929, 26-51-101 et seq., in an amount as determined in subsection (b) of this section to a biodiesel supplier for the cost of the facilities and equipment used directly in the wholesale or retail distribution of biodiesel fuels.

(b) The amount of the credit allowed shall be equal to five percent (5%) of the cost of the facilities and equipment.

(c) The costs of service contracts, sales tax, or acquisition of undeveloped land shall not be included in determining the amount of the credit.

(d) (1) No income tax credit shall be claimed by a supplier for any facility or equipment that is in use on or before the certification of the company for tax credits or for which a tax credit was previously claimed by a supplier for any other tax year.

(2) The provisions of this subsection shall not apply if any entity is sold and the entity is entitled to an income tax credit under this subchapter.

(3) The tax credit provided in subsection (b) of this section may be carried forward for a period not to exceed three (3) years.

(e) (1) A supplier is entitled to a refund of all or a portion of the tax imposed on the supplier under 26-56-201, 26-56-502, and 26-56-601.

(2) (A) The amount of the refund authorized in subdivision (e)(1) of this section shall be equal to fifty cents (50cent(s)) for each gallon of biodiesel fuel used by the supplier to produce a biodiesel mixture for sale by the supplier or for use by the supplier in a trade or business.

(B) To the extent the gallons of biodiesel fuel mixed with undyed, clear distillate special fuel to make a biodiesel mixture exceed two percent (2%) of the total biodiesel mixture, the refund shall be limited to two percent (2%) of the total gallons of biodiesel mixture.

(3) The refund allowed under this subsection shall first be available to a supplier when:

(A) One (1) or more biodiesel producers:

(i) Sign a financial incentive agreement with the Arkansas Economic Development Council;

(ii) Are approved by the Alternative Fuels Commission as biodiesel producers with biodiesel fuel production capacity to produce at least one million gallons (1,000,000 gal.) of biodiesel fuel in a twelve-month period;

(iii) Certify that they will produce biodiesel fuel meeting appropriate federal and state standards; and

(iv) Begin production of biodiesel fuel; and

(B) The supplier is approved as a biodiesel supplier by the Director of the Department of Finance and Administration in accordance with rules promulgated by the director.

(4) A supplier may file a claim for refund for the sale or use of biodiesel mixture that occurred on or after the date that all of the requirements of subdivision (e)(3) of this section have been met.

(5) (A) A claim for refund under this subsection shall be filed quarterly, and in no event shall a claim be filed later than one (1) year after the sale or use of the biodiesel mixture under subdivision (e)(2) of this section.

(B) The total amount of refunds paid to a supplier during a calendar year shall not exceed the tax liability of the supplier under 26-56-201, 26-56-502, and 26-56-601 during the calendar year.

(C) Except as otherwise provided in this subsection, a claim for refund under this subsection shall be subject to the Arkansas Tax Procedure Act, 26-18-101 et seq.

(6) The director shall promulgate rules for the administration and enforcement of this subsection.

(7) This subsection shall expire on June 30, 2007.