Maryland Tax Incentives
Cellulosic Ethanol Research and Development Tax Credit
An individual or corporation may claim a credit against the state income tax of up to 10% for qualified research and development expenses for cellulosic ethanol technology. The total amount of approved credits may not exceed $250,000 in a single calendar year. If the credit allowed exceeds the tax liability of the individual or corporation for that taxable year, the credit may be applied to future taxable years until the credit is exhausted or for up to 15 taxable years after the qualified expenses were incurred, whichever occurs first. (Reference House Bill 140, 2008)
Hybrid Electric Vehicle (HEV) and Electric Vehicle (EV) Tax Credit
A tax credit is allowed against the excise tax imposed for the purchase of qualified HEVs and EVs. For qualified EVs, the tax credit may not exceed $2,000. For qualified HEVs, the credit may not exceed: a) $250 if the vehicle battery provides at least 5% but less than 10% of maximum power available; b) $500 if the vehicle battery provides at least 10% but less than 20% of maximum power available; c) $750 if the vehicle battery provides at least 20% but less than 30% of maximum power available; d) $1,000 if the vehicle battery provides at least 30% of maximum power available. A qualified EV must meet the definition set forth in the Internal Revenue Code. A qualified HEV must meet the current vehicle exhaust standard set under the federal Tier 2 program for passenger vehicles. (Reference Maryland Statutes, Transportation Code 13-815)
Biofuels Production Credits
Under the Renewable Fuels Promotion Act of 2005, qualified ethanol and biodiesel producers are eligible for ethanol and biodiesel production credits. To be eligible for the credits, the producer must first apply to the Renewable Fuels Incentive Board (Board) and receive certification as a producer. Credits may be offered to certified producers in Maryland for ethanol or biodiesel produced on or after December 31, 2007. The Board may not pay a credit for ethanol or biodiesel produced after December 31, 2017.
Ethanol production credits are as follows: a) $0.20 per gallon of ethanol produced from small grains such as wheat, rye, triticale, oats, and hulled or hull-less barley; and b) $0.05 per gallon of ethanol produced from other agricultural products. The Board may not certify ethanol production credits for more than a total of 15 million gallons per calendar year, of which at least 10 million gallons must be produced from small grains.
Biodiesel production credits are as follows: a) $0.20 per gallon of biodiesel produced from soybean oil (the soybean oil must be produced in a facility or through expanded capacity of a facility that began operating after December 31, 2004), and b) $0.05 per gallon for biodiesel produced from other feedstocks, including soybean oil produced in a facility that began operating on or before December 31, 2004. The Board may not certify biodiesel production credits for more than a total of five million gallons per calendar year, of which at least two million gallons must be from soybean oil produced in a facility as described above.
(Reference Maryland Statutes, Agriculture Code 10-1501 through 10-1507)
