Ethanol tax incentives headed to Pritzker's desk


Tax incentives aimed at boosting the use of gasoline mixed with ethanol were passed by Illinois lawmakers amid the close of the spring legislative session.

Among the provisions is a 10% state sales tax exemption for E15, a 20% tax exemption for mid-range ethanol, or fuel containing 20% to 50% ethanol, and a 100% tax exemption for E85. All three exemptions sunset on Dec. 31, 2028.

The incentives come as consumer demand for E15 is expected to remain steady after the U.S. Environmental Protection Agency in May issued a second waiver to allow summertime E15 sales. The agency is also working to craft a rule that starting in 2024 would permit year-round sales of E15 in Illinois and seven other Midwest states, opening the door for expanded use of fuels containing higher blends of ethanol.

The federal policy changes, along with the extended state tax exemptions, are expected to drive sales and ultimately deliver more market opportunities for Illinois farmers.

The state sales tax measures were first introduced in legislation sponsored by state Sen. Patrick Joyce, D-Essex, and were written into a larger tax omnibus bill that passed the Illinois House on a 79-25-2 vote and the Senate on a 53-1 vote.

It now goes to Gov. J.B. Pritzker, who is expected to sign the legislation into law.

Joyce’s original bill, which had support from Illinois Farm Bureau and Illinois Corn Growers Association, would have allowed the exemptions to be in place until 2030. But concerns from legislators that the incentives could have a larger fiscal impact in future years led to the shorter sunset.

Joyce in a statement said the exemptions are a “major boost” for Illinois’ corn industry.

“When the demand for ethanol-based fuel goes up, we see the demand for Illinois corn rise as well,” Joyce said. “This new tax structure will not only help farmers, but it’s also better for our environment.”

Joyce, a fourth-generation farmer, added the policy is a “win-win situation” for the state because “it helps farmers by increasing corn demand and supports our environment by incentivizing the usage of cleaner-burning fuels.”

State Rep. Charlie Meier, R-Okawville, who farms in Washington County, echoed that outlook.

“Anything we can do to try to keep the economy going in rural Illinois is very essential, and this bill helps do that,” Meier told FarmWeek.

Meier said increasing the demand for ethanol not only increases market opportunities for Illinois grain farmers, but it further leads to advantages for livestock producers, who can use leftover feedstocks.

“(Gasoline mixed with ethanol) is a renewable energy that creates jobs all along the way, which creates more positive economic effects in small rural towns,” Meier said.

General Assembly passes other IFB-supported bills

State lawmakers before departing Springfield on May 27 also sent to Pritzker a $50.6 billion budget and hundreds of other bills, including some that had support from IFB. They include:

  • SB 1701, legislation sponsored by state Sen. Ram Villivalam, D-Chicago, and state Rep. Michael Kelly, D-Chicago, that aims to provide practical soil health authority for soil and water conservation districts (SWCDs) and continue farmer involvement in state and federal conservation programs. The bill further allows SWCDs to better leverage federal funds, continues the Partners for Conservation program and provides more direction to SWCDs on soil health duties. IFB worked with the Illinois Association of Soil and Water Districts and American Farmland Trust on the bill, which passed the House on a 106-7-1 vote and the Senate on a 56-0 vote.
  • HB 3814, a bill sponsored by state Sen. Doris Turner, D-Springfield, and state Rep. Sonya Harper, D-Chicago, that would allow schools to support FFA and 4-H students attending competitions or exhibitions. It would also benefit schools by counting those students as being “in attendance” while participating in those events. The bill passed both chambers on unanimous votes.
  • HB 2040, a policy that reflects an IFB legislative priority and was sponsored by state Sen. Adriane Johnson, D-Buffalo Grove, and state Rep. Curtis Tarver, D-Chicago. It would amend the current law to allow township clerks to be appointed or contracted from outside the township if no qualified candidate can be found. The issue is spread throughout rural and sparsely-populated townships, where there often are no qualified or willing individuals to serve, and was elevated in 2021 by the Edwards and Wabash county Farm Bureaus. It passed both chambers on unanimous votes.


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