The House Ways and Means Committee has been urged to extend tax incentives for ethanol production and expand them to an ethanol-based octane enhancer.
Most of a hearing on ethanol centered on whether Internal Revenue Service should extend the credit to the octane enhancer ethyl tertiary butyl ether (ETBE).
Currently, gasohol containing at least 10% alcohol is taxed at 31/3/gal vs. 9/gal for gasoline. There is a similar reduction for diesel and other fuels with alcohol.
Also, other fuels consisting of at least 85% alcohol are taxed at 3/gal rather than 9, or producers may claim an income tax credit of 40-60/gal. The cre...