Biomass-to-energy Plant Credit

INCOME TAXPAYER-Effective for all taxable years commencing after Dec. 31, 2005 and before Jan. 1, 2011.

An income taxpayer that makes a qualified investment in a new biomass-to-energy plant or in the expansion of an existing biomass-to-energy plant shall be allowed a tax credit.

Qualifications

Before making a qualified investment, a taxpayer shall apply to the Secretary of Commerce to enter into an agreement for this tax credit. After receipt of the application the Secretary of Commerce may enter into an agreement with the applicant for a credit if it is determined that the taxpayer’s proposed investment satisfies the requirements.

Credit Amount

The credit is 10 percent of the taxpayer’s qualified investment on the first $250 million invested, and 5 percent of the taxpayer’s qualified investment that exceeds $250 million. The credit will be taken in ten equal, annual installments, beginning with the year in which the taxpayer places into service the new biomass-to-energy plant or the expansion of an existing biomass-to-energy plant.

Limitation of Credit

If the amount of the credit exceeds the taxpayer’s tax liability in any one taxable year, the remaining portion of the credit may be carried forward until the total amount of the credit is used, except that no such tax credit shall be carried over for deduction after the 14th taxable year after the taxable year in which the first annual installment is allowed.

Procedures to Claim the Credit

You may download Schedule K-79 to claim the biomass-to-energy plant credit. This schedule must be completed and submitted with the income tax return. You may also call the Department of Revenue voice mail system at 785-296-4937 to request Schedule K-79. You will be asked to give your name, address, phone number and form(s) you desire. Please allow two weeks for delivery of your forms.


Qualified Investment

Qualified investment means expenditures made in construction of a new biomass-to-energy plant or in the expansion of the capacity of an existing biomass-to-energy plant, for real and tangible personal property incorporated in and used as part of the plant.

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New Biomass-to-energy Plant

New biomass-to-energy plant means a biomass-to-energy plant, construction of which begins after Dec. 31, 2005.

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Expansion of an Existing Biomass-to-energy Plant

Expansion of an existing biomass-to-energy plant means expansion which begins after Dec. 31, 2005, of the capacity of an existing biomass-to-energy plant by at least 10 percent of the capacity.

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Biomass-to-energy Plant

An industrial process plant, located in this state, where biomass is processed to produce annually any of the following, and coproducts: (1) Not less than 500,000 gallons of cellulosic alcohol; (2) Liquid or gaseous fuel or energy in a quantity having BTU value equal to or greater than 500,000 galons of cellulosic alcohol; or (3) Oil produced for direct conversion into fuel in a quantity having BTU value equal to or greater than 500,000 gallons of cellulosic alcohol.

Biomass

Any organic matter available on a renewable or recurring basis, including solid and liquid organic waste, but excluding: (1) Petroleum oil, natural gas, coal and lignite, and any products thereof; and (2) Corn or grain sorghum suitable for human consumption.

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