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Ethanol Tax Break Targeted
By Mr Ethanol | May 19, 2008
Sioux Falls Argus Leader:
A Republican senator who failed during the legislative session to remove the 2-cent ethanol tax break says he’ll press the idea in a summer study of highway needs.
Sen. Jerry Apa of Lead says the ethanol industry has matured and doesn’t need the two-cent-per gallon tax break as much as the state highway fund needs revenue for road building and repair.
Apa is a member of the study committee, which will review long-range needs for state and local roads and bridges, along with ways to pay for highway work in the future.
“The ethanol industry is a mature industry,” Apa said. “It amounted to about 55 percent of the motor fuel sold last year. We have to start having a dialogue about it, at least. I’m all for giving a hand to a new industry, but when they’re an adult, they should start paying their own way.”
The state’s motor-fuel tax, the foundation of the highway fund, has been stagnant for a number of years. Regular gasoline is taxed at 22 cents a gallon. Ethanol is taxed 20 cents a gallon, and a high-percentage ethanol blend called E85 is taxed 10 cents a gallon.
Eliminating the tax incentive for ethanol is shortsighted and would be a blow to the state’s farm economy, a Democratic senator says.
“Removing the two cents isn’t going to do diddly for roads,” said Sen. Jim Peterson of Revillo, who also is a member of the study committee.
“They don’t grow corn out in his (Apa’s) part of the state, but you have to think statewide benefits,” Peterson said. “We have 14 ethanol plants, about $1 billion in infrastructure, and it’s struggling in some ways to make it.” Read more.
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