Incentives Watch: Oregon’s Bovine Manure Tax Credit Isn’t the Only “Crappy” Credit That Exists


Cow in Field

Crap happens, and in states like Oregon and New Mexico, some taxpayers may even benefit from it.

Last fall, Oregon enacted the Bovine Manure Tax Credit, which offers bovine manure producers and collectors a tax credit for each wet ton of manure collected to be used as a biofuel or to produce a biofuel. In recent weeks, the state enacted a new set of temporary rules for administering the credit beginning on or after Jan. 1, 2018. The new rules include definitions, eligibility requirements, application information, and fees.

Applicants eligible for the credit include bovine manure producers or collectors subject to Oregon’s personal income tax; corporations that collect bovine manure in Oregon that is used in-state as biofuel or to produce biofuel and that are subject to Oregon’s corporation excise tax or corporation income tax; and tax exempt organizations that collect bovine manure in Oregon used in-state as biofuel or to produce biofuel.

According to Or. Admin. R. 603-020-0016, applicants must submit their application, along with an application fee of $100 plus 3.8 percent of the total credit amount, within 60 days of the end of the tax quarter for which the manure is produced or collected. In addition to the information requested on the form, the applicant must also provide information about the amount of wet ton manure claimed in the application.

New Mexico has a similar credit, the Agricultural Biomass Tax Credit, which provides taxpayers a credit for each wet ton of manure from a commercial dairy or feedlot operation that is transported from the dairy or feedlot to a facility that uses agricultural biomass to generate electricity or fuel. New Mexico’s credit is available for any taxpayer who owns a dairy or feedlot.

Oregon and New Mexico aren’t the only states providing credits when animals go number two. Nevada’s Recycling Property Tax Abatement is available for businesses that use recycled material, which includes agricultural waste such as manure, as its primary fuel for the generation of electricity. In Arizona, the Renewable Energy Production Credit grants a credit to owners of qualified energy generators that use a wind or biomass derived qualified energy resource, including manure, based on the amount of energy produced.

Even though it may seem dirty, it appears as though manure is making a name for itself when it comes to clean energy credits.

Continue the discussion on Bloomberg Tax's State Tax Group on LinkedIn: Does your state provide animal waste-related credits?

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