Form Osc - Oil Seed Crushing And Biodiesel/biolubricant Production Facilities Credit - 2007 Page 2
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3Form OSC General Instructions
What is “biodiesel”?
What cost do I use to calculate my oilseed crushing facility
credit?
Biodiesel is a fuel produced from monoalkyl esters of long-
chain fatty acids derived from vegetable oils, renewable lipids,
The cost used to calculate your oilseed crushing facility credit is
animal fats, or any combination of these ingredients. This fuel
the amount of the investment that you have made in the specifi c
must meet the requirements of ASTM D6751, also known as the
property used to calculate your depreciation deduction for
Standard Specifi cation for Biodiesel Fuel (B-100) Blend Stock
federal income tax purposes. It does not include the installation
for Distillate Fuels, as adopted by the American Society for
cost of the equipment.
Testing and Materials.
If I am claiming the oilseed crushing facility credit, can I
What is “biolubricant”?
also deduct the annual depreciation on my investment?
Biolubricant is a product, other than food or feed, substantially
Yes, you can. This credit is not in lieu of any depreciation or
composed of certain biological products, agricultural materials
amortization deduction that you are allowed for your investment.
or forestry materials. The product is used in place of a
What requirements do I have to meet in order to qualify for
petroleum-based lubricant.
the oilseed crushing facility credit?
Oilseed Crushing Facility Credit
In order for your investment to qualify for this credit the following
requirements must be met:
Am I able to carryover my oilseed crushing facility credit
or my biodiesel/biolubricant production facility credit
• The property is used primarily to crush oilseed or to
if I cannot absorb the full amount in my fi rst year of
manufacture a product from oilseed and is operational before
production?
January 1, 2015, and
Yes, the credits can be carried forward for up to seven years.
• You are an individual or entity who as the owner, including a
However, if you are not crushing oil seed or producing biodiesel
contract purchaser, has a benefi cial interest in the business
or biolubricant, you cannot claim any tax credit for that year.
that crushes oilseed or manufacturers a product from
Am I subject to recapturing my credit that I previously
oilseed, and
received if I cease operating my business?
• Your business has been processing oilseed or manufacturing
Yes, you are. If you cease operating your business for a period
a product from oilseed during your tax year.
of 12 continuous months, within fi ve years from the year you
claimed the credit, you are required to recapture this credit in
Biodiesel Production Facility Credit
the year you ceased operations.
I am constructing a facility to produce biodiesel/
If my business is a partnership or an S corporation, are my
biolubricant. What costs are available to me to be eligible
partners or shareholders entitled to the oilseed crushing
for the biodiesel/biolubricant production facility tax credit?
and biodiesel/biolubricant production facilities credit?
The costs used to calculate your biodiesel/biolubricant
As a partnership or an S corporation, your partners or
production facilities credit are the costs of investing in
shareholders are entitled to apply these credits against their
depreciated property for constructing or equipping your facility.
income tax or corporate license tax liability. The amount of each
NEW
You may claim a credit for costs incurred in the two years
partner’s or shareholder’s credit is based on their distributive
before you began production.
or pro-rata share of the partnership’s or S corporation’s cost of
If I am claiming the biodiesel/biolubricant production
investing in the specifi c equipment.
facility credit, can I also deduct the annual depreciation on
For example, if your business is an S corporation with
my investment?
four shareholders with equal ownership interest, each
Yes, you can. This credit is not in lieu of any depreciation or
shareholder would be entitled to 25% of the total credit.
amortization deduction that you are allowed for your investment.
When fi ling your Montana partnership return, Form PR-1,
When am I eligible for the biodiesel/biolubricant production
or your Montana S corporation return, Montana Form CLT-
facility credit?
4S report your Oilseed Crushing and Biodiesel/Biolubricant
You are entitled to the biodiesel/biolubricant production facility
Production Credit on Schedule II, line 17. Include with
credit in a tax year that your facility produces this product. If you
your return a completed Form OSC and a supplemental
are in the process of constructing a facility in one tax year but
schedule identifying each partner or shareholder and their
have not begun processing in the same tax year you are not
pro-rata share of the credit.
eligible for this credit until the year your production begins.
What requirements do I have to meet in order to qualify for
I have purchased equipment to begin crushing oilseed
the biodiesel/biolubricant production facility credit?
but have not completed installation or began crushing the
oilseed. Am I eligible for the oilseed crushing facility credit
In order for your investment to qualify for this credit, the
in the year I purchase the equipment?
following requirements must be met:
No, you are not. The investment you have made in the
• The property is used primarily to manufacture biodiesel or
equipment does not allow you to apply for the oilseed crushing
biolubricant and is operational before January 1, 2015, and
facility credit until the fi rst year your facility begins processing
• You are an individual or entity who as the owner, including a
oilseed or your facility manufactures a product from oilseed.
contract purchaser, has a benefi cial interest in the business
NEW
You may claim a credit for costs incurred in the two years
that manufactures biodiesel or biolubricant, and
before you began crushing oilseed.
• Your business has been manufacturing biodiesel or
biolubricant during your tax year.
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