On October 22, 2004, President Bush signed into law H.R. 4520, the American Jobs Creation Act of 2004 (JOBS Bill), which created the Volumetric Ethanol Excise Tax Credit (VEETC). Click here to review the law.

VEETC replaces the federal ethanol excise tax credit that existed previously. VEETC does the following:

• Improves our nation's transportation infrastructure, because the full amount of user excise taxes levied will be collected and remitted to the Highway Trust Fund (HTF), eliminating the negative impact on the Highway Trust Fund;
• Eliminates the waste, fraud and abuse of the excise tax collection system, which means that 18.4¢ per gallon of each gallon of ethanol-blend fuel will be remitted to the U.S. Treasury;
• On average, will generate more than $3 billion per year in additional HTF revenue, which would improve the ability of the federal government to address the nation's transportation infrastructure needs;
• Streamlines the excise tax collection process when ethanol is blended with transportation fuels;
• Creates a simplified system of excise tax collection complemented by a regimented petroleum, renewable fuel, and terminal delivery system;
• Eliminates the restrictive blend levels (5.7%, 7.7% and 10%) dictated by the tax code to reflect obsolete Clean Air Act requirements, providing significant flexibility to oil companies to blend as much or as little ethanol to meet their octane or volume needs;
• Streamlines the tax refund system for below the rack blenders to allow a tax refund of 51 cents per gallon on each gallon of ethanol blended with gasoline to be paid within 20 days of blending gasoline with ethanol;
• Eliminates the need of the alcohol fuels income tax credit that is subject to the alternative minimum tax. Any taxpayer eligible for the alcohol fuels tax credit will be able use the volumetric ethanol excise tax credit system, which means they will be able to file for a refund for every gallon of ethanol used in the marketplace without regard to the income of the taxpayer or whether the ethanol is used in a taxed fuel or tax exempt fuel.
• Provides new market opportunities for ethanol, biodiesel, and E-85 in off-road and other non-taxable markets, and ETBE.

Click here for a more detailed explanation of the VEETC provisions.

• IRS Guidance on Denaturant Rules
• RFA Recommended Practices Regarding Denaturant Content in Fuel Ethanol (3/09)
• IRS Form 637
  Application for Registration (for Ethanol Plants)
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• IRS Form 720
  Quarterly Federal Excise Tax Return
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• IRS Form 8849
  Claim for Refund of Excise Taxes
  View PDF
  
  Non Taxable Use of Fuels
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  Alcohol Fuel Mixtures and Biodiesel Mixtures
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  Sales by Registered Ultimate Vendors
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  Section 4081(e) Claims
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  Other Claims
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