A comprehensive corporate tax reform bill, passed Oct. 11 by a U.S. Senate vote of 69-17, and by the House of Representatives the previous week, contains extra benefits for Missouriâ€™s agriculture industry. The tax bill, known as the Foreign Sales Corporation/Extraterritorial Income (FSC/ETI) Act and the American Jobs Creation Act of 2004, includes provisions creating an excise tax exemption for biofuels. The bill now goes on to President Bush for his signature.
The legislation, which was designed to repeal corporate tax provisions found in violation of global trade rules, also includes several provisions that will benefit Missouri farmers by providing incentives for production and marketing of clean burning biofuels made from soybeans and corn.
Dale Ludwig, Missouri Soybean Association (MSA) executive director, hailed passage of this legislation as the most significant development since Missouri soybean farmers began the U.S. biodiesel commercialization effort in 1991. "This will move biodiesel from a boutique fuel status to a major commercial fuel, setting the stage for the development of production facilities here in Missouri," Ludwig says.
"MSA is very pleased with the leadership Missouriâ€™s entire congressional delegation has shown in pushing this bill through with the provisions most important to Missouriâ€™s soybean farmers," Ludwig adds.
The FSC/ETI bill creates an excise tax exemption, modeled after the ethanol exemption, which will expand biodiesel use by 500 million gallons per year. Direct benefits of the legislation to Missouri include:
- Potential development of commercial size biodiesel production facilities;
- Additional demand for 20 million bushels of soybeans;
- Price per bushel increases for soybeans by 10 cents.
The Missouri Corn Growers Association (MCGA) also hails the action for its potential to help consumers, farmers, the environment and energy security. "Corn growers and ethanol enthusiasts are glad that the Senate finished this bill in extra innings," says MCGA CEO Gary Marshall. "By touching all the bases, ethanol in this bill is a grand slam for America!"
Specifically, H.R. 4520 extends the ethanol tax incentive through 2010, eliminates any impact of the ethanol program on the Highway Trust Fund, and creates greater flexibility for refiners to blend ethanol fuel through a new Volumetric Ethanol Excise Tax Credit (VEETC) that will replace the current excise tax exemption. In addition, the JOBS bill improves the small ethanol producer tax credit by allowing farmer-owned cooperatives to share the benefits of the program with their farmer members. The bill will expand
opportunities for additional ethanol plants in Missouri, and the benefits that are associated, including quality jobs.
"When you see that oil is $50 a barrel and we see what corn prices are doing lately because of this bin-busting crop, if we can help lessen our dependence on foreign oil and help farmers pocket the profits of what they grow, it's a win-win situation," says Congressman Ken Hulshof, R-MO.
FYI: Visit the Missouri Soybean Association Web site