Montana Form Bbsc Draft - Biodiesel Blending And Storage Credit - 2011 Page 2
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2Form BBSC General Instructions
for blending during a tax year, no credit can be claimed for
What is “biodiesel”?
the tax year.
Biodiesel is a fuel produced from monoalkyl esters of long-
chain fatty acids derived from vegetable oils, renewable
Am I required to recapture my credit that I previously
lipids, animal fats, or any combination of these ingredients.
received if I cease operating my business?
This fuel must meet the requirements of ASTM D6751, also
Yes, you are. If you cease blending biodiesel with
known as the Standard Specifi cation for Biodiesel Fuel
petroleum diesel for sale for 12 continuous months, within
(B-100) Blend Stock for Distillate Fuels, as adopted by the
fi ve years from the year that you initially claimed the credit,
American Society for Testing and Materials.
or if your blended biodiesel sales were less than 2% of
your total diesel sales by the end of your third year, you
I purchased equipment to begin blending biodiesel
are required to recapture your credit in the year you cease
with petroleum diesel in a prior year but I have just
blending or at the end of your third year if your sales were
begun blending the fuel for sale this year. Am I eligible
less than 2% of total diesel sales.
for the biodiesel blending and storage credit?
Yes, you are. The credit is available in any year that you
How do I claim my credit when I am a partner or
blend biodiesel with petroleum diesel for the purpose of
shareholder in a partnership or an S corporation that
resale. If you purchased the equipment in the two tax years
invested in the depreciable property used for storing or
before you began blending the biodiesel and the petroleum
blending biodiesel with petroleum diesel?
diesel, you can use the costs from those years to calculate
Your partnership or S corporation will report the credit on its
your current tax year biodiesel blending and storage credit.
informational tax return and provide you with your share of
the credit on Montana Schedule K-1.
What costs do I use to calculate my biodiesel blending
and storage credit?
If you are a partner, your share of the credit is based on
The costs used to calculate your credit are the amounts
the same proportion used by you to report your income or
that you have invested in depreciable property that is used
loss from the partnership for Montana tax purposes unless
for storing or blending biodiesel with petroleum diesel for
the partners have an agreement providing for a different
sale.
allocation. If you are a shareholder, your share of the credit
is based on the pro rata share of the corporation’s cost of
If I am claiming the biodiesel blending and storage
investing in the biodiesel blending facility.
credit, can I also deduct the annual depreciation on my
For example, if your business is an S corporation with
investment?
four shareholders with equal ownership interest, each
Yes, you can. This credit is not in lieu of any depreciation
shareholder would be entitled to 25% of the total credit.
or amortization deduction that you are allowed for your
investment.
What information do I have to include with my tax
return when I claim this credit?
What requirements do I have to meet in order to qualify
Individuals and C corporations fi ling paper returns must
for the biodiesel blending and storage credit?
include a completed Form BBSC. Partnerships and S
In order for you to qualify for this credit, the following
corporations fi ling paper information returns must include
requirements have to be met:
a separate statement identifying each owner and his or
• Your investment is for depreciable property that is used
her proportionate share, in addition to a completed Form
primarily to blend biodiesel that is made entirely from
BBSC.
Montana-produced feedstocks.
Questions? Please call us toll free at (866) 859-2254 (in
• You blended biodiesel with petroleum diesel for sale
Helena, 444-6900).
during the current tax year.
• Your storage and blending equipment purchased is used
in Montana primarily to blend biodiesel for sale.
• You anticipate that your sales of biodiesel will be at least
2% of your total diesel sales by the end of the third year
following the initial year you claim the credit.
• You are an owner, contract purchaser, or lessee who has
a benefi cial interest in a business that blends biodiesel.
If the credit exceeds my tax liability, can I carry any
excess credit to another tax year?
Yes, you can carry forward unused credit for up to seven
years. However, if you are not blending or storing biodiesel
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