Tax Incentive for Production of Alcohol

There is a 30 cents a gallon tax incentive for alcohol produced in Montana from 100 percent Montana agricultural products, including Montana wood or wood products. The amount of the incentive is reduced proportionately if agricultural or wood products not from Montana are used in the production of the alcohol. Total payments of the incentive can’t exceed $6 million in any consecutive 12-month period. An individual alcohol distributor can’t receive incentive payments exceeding $3 million in any consecutive 12-month period. These benefits are available until July 1, 2010. To receive the incentive payments, an alcohol distributor must provide a written plan to the Department of Transportation at least 24 months before the anticipated collection of the incentives. The plan must contain information on the source or sources of financing for the acquisition of the plant, land, and equipment used for the production of gasohol; the anticipated source of agricultural products used in the production of gasohol; and the anticipated time, quantity, and duration of production of gasohol.