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Note 3 - Government Tax Credits
12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Other Income and Other Expense Disclosure [Text Block]
3.

GOVERNMENT TAX CREDITS

 

BTC and Small Agri-Biodiesel Producer Tax Credit and Clean Fuel Production Tax Credit

 

The BTC provides a one dollar per gallon tax credit to the blender of biomass-based diesel with at least 0.1% petroleum-based diesel fuel.  The Company recorded this credit as a reduction to cost of goods sold as applicable sales were made.

 

The Further Consolidated Appropriations Act of 2020 was passed by Congress and signed into law on December 20, 2019, retroactively reinstating the BTC for 2018 and 2019 and extending it through December 31, 2022.  With the passage of the Inflation Reduction Act (“IRA”) in August 2022, the BTC was extended through December 31, 2024.

 

As part of each law from which the BTC mentioned above was reinstated, small agri-biodiesel producers with production capacity not in excess of 60 million gallons were eligible for an additional income tax credit of $0.10 per gallon on the first 15 million gallons of agri-biodiesel sold (the “Small Agri-biodiesel Producer Tax Credit”). The Company was eligible for this credit and recognized $1,500 for 2023, 2022, and 2021 in the same accounting period as the benefit from the BTC as described above.  The benefit of this credit is recognized as a component of income tax (benefit) provision.

 

The Inflation Reduction Act (IRA), created the clean fuel production credit (“CFPC”) for qualifying transportation fuel produced after 2024 and sold on or before December 31, 2027. The CFPC consolidates and replaces several fuel related credits set to expire December 31, 2024 including the BTC and the Small Agri-biodiesel Producer Tax Credit. 

 

The CFPC is an income tax credit structured on a sliding scale so that producers become eligible for larger credits as the GHG emissions of the fuels they produce approach zero.  For producers meeting the prevailing wage and registered apprenticeship requirements, the maximum credit is $1.00 per gallon of nonaviation fuel.  For producers not meeting the prevailing wage and registered apprenticeship requirements, the maximum credit is 20 cents per nonaviation fuel gallon.

 

CARES ACT – EMPLOYEE RETENTION TAX CREDIT

 

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), was enacted on  March 27, 2020, to encourage eligible employers to retain employees on their payroll.  The Consolidated Appropriations Act, effective  January 1, 2021, broadened the eligibility of the credit.  The Company applied for this credit and will recognize the benefit of the credit once reasonable assurance can be made as to the retention of the credit.