The Volumetric Ethanol Excise Tax Credit (VEETC) will be extended through 2011 if the tax bill released by the U.S. Senate last night is ultimately passed. But, the overall bill to extend expiring Bush-era tax cuts is receiving objection from House Democrats concerned about tax cut provisions for the wealthiest Americans. House Democrats voted not to allow the bill to reach the floor without changes, reported the Associated Press.
The Senate bill includes tax provisions designed to increase production of biodiesel fuel and hybrid automobiles and to extend the current 45-cent per gallon tax credit for ethanol through the end of 2011.
Ethanol advocates welcomed the news that the ethanol tax credit would be extended in the Senate bill. Renewable Fuels Association President and CEO Bob Dinneen said the bill “is a common sense approach that will ensure American ethanol production continues to evolve.” Dinneen added that RFA urges Congress to “move expeditiously to pass the legislation. Then, honest and good faith discussions about how we reform all energy tax policy--including for all oil and ethanol technologies—can occur.”
Brian Jennings, executive vice president, American Coalition for Ethanol (ACE), stated, “Inclusion of this one-year extension of ethanol tax incentives proves that despite shameless attacks by special interests threatened by ethanol, bipartisan support remains strong in Congress.”
Tom Buis, CEO, Growth Energy, added that an extension of the ethanol tax credit “will give the industry certainty, and Congress the opportunity, to move forward with reforms that will remove the infrastructure barriers to the fuels market . . .”
The Associated Press reported that President Obama expects that the bill will pass because “nobody—Democrat or Republican—wants to see people’s paychecks smaller on January 1 because Congress didn’t act [on tax cuts].”
Time will tell. We’ll report what happens next.