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Certification now required for renewable fuels tax credits


HONOLULU — For calendar year 2018 and beyond, taxpayers claiming Hawaii’s renewable fuels production tax credit (RFPTC) will be subject to several revised requirements. These revised requirements are the result of the enactment of Act 142 of 2017 and Act 143 of 2018.  Following are some of the new requirements associated with each act.

Act 142:  The revised procedure under Act 142 requires RFPTC-seeking taxpayers, at their sole expense, to have an independent, third party, provide a certified statement filed with the state Department of Business, Economic Development, and Tourism (DBEDT).  Previously, the certification for the RFPTC was conducted by DBEDT at the state’s expense.  The third-party statement is to certify, among other things, the type, quantity, and British thermal unit (Btu) value of each qualified renewable fuels, segregated by type of fuel that was produced and sold; the feedstock used to produce the renewable fuels, including the purpose for which the fuel was produced; and the proposed total amount of RFTPC being claimed by each taxpayer.  For complete details on the requirements under Act 142 and all applicable forms required to claim the RFPTC click here.

Act 143:  The revised RFPTC requirement under Act 143 has reduced the minimum renewable fuels production level from 15 billion Btu to 2.5 billion Btu and expanded the qualifying renewable feedstock that can be used to produce the renewable fuels.

The RFPTC was established in 2016 and allows producers of renewable fuels from a variety of feedstocks to claim the credit through the 2021 tax year.

The RFPTC is equal to 20 cents per 76,000 Btu of renewable fuels produced (using the lower heating value and is capped annually at $3 million per taxpayer and $3 million annually in the aggregate for all taxpayers. The RFPTC is allocated on a first-come, first-served basis.

Aside from filing the third-party certified statement, taxpayers planning to claim the RFPTC must first file written notification to DBEDT of their intent to begin production of renewable fuels. Additionally, taxpayers are required to file a notification with DBEDT within 30 days following the start of production. The form to complete both of these requirement is entitled The Notice of Intent/Notice to Start Production. Click hereto download the form.

For a full listing of renewable fuels tax credit requirements, taxpayers should completely review Act 142 and Act 143. In addition, the Hawaii Department of Taxation has issued a Tax Information Release that defines certain terms related to the RFPTC that are not defined in statute: Tax Information Release (TIR) No. 2018-03.

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