Missouri Governor Unveils Tax Incentives to Boost Ethanol Use

Strategic Insights -

Missouri Governor Matt Blunt has announced a series of tax incentives to encourage consumers to use ethanol and purchase vehicles that run on alternative energy. Speaking at the Ford Motor Co.'s Kansas City Assembly Plant, Blunt proposed offering tax breaks to gas stations that install equipment to sell E-85, a blend of ethanol and gasoline. He also suggested offering tax credits to consumers who buy hybrid vehicles or those that run on E-85. The incentives aim to promote a healthier environment and a stronger economy by reducing the state's reliance on foreign oil and decreasing pollution.

Key Takeaways:

  • The tax incentives include offering $2 million in tax breaks to gas stations that install equipment to sell E-85, a blend of ethanol and gasoline.
  • Drivers who buy E-85 can receive up to $500 in annual tax credits, and consumers who purchase hybrid vehicles can receive a 10 percent state income tax deduction, or up to $1,500.
  • The legislation proposes offering tax credits of 25 cents per gallon for the first year to consumers using E-85.
  • Currently, only 92 out of the state's 4,312 gas stations are able to sell E-85, and up to $40,000 is required for a gas station to replace or upgrade its pumps and fuel tanks to sell E-85.
  • The Missouri Department of Agriculture reports that 85-90 percent of the state's gas stations already sell ethanol blends in their regular unleaded gasoline.
  • The state has set a goal of requiring at least 70 percent of new vehicles purchased by the state Office of Administration to be able to use E-85 fuel.

Statistics:

  • Only 92 out of 4,312 gas stations in Missouri are able to sell E-85.
  • The proposed tax incentives could cost the state $2 million.
  • Up to $40,000 is required for a gas station to replace or upgrade its pumps and fuel tanks to sell E-85.
  • The Missouri Department of Agriculture reports that 85-90 percent of the state's gas stations already sell ethanol blends in their regular unleaded gasoline.

Sources:

  • The Associated Press.
  • Ron Hayes, fuel quality program manager for the Missouri Department of Agriculture.