Ethanol and Biodiesel Sales Tax Exemption (Illinois)

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Last modified on February 12, 2015.

Financial Incentive Program

Place Illinois

Name Ethanol and Biodiesel Sales Tax Exemption
Incentive Type Sales Tax Incentive
Applicable Sector Commercial
Eligible Technologies Ethanol, Biodiesel
Active Incentive No

Implementing Sector State/Territory
Energy Category Renewable Energy Incentive Programs
Amount 100% for blends exceeding E-70 or B-10

Equipment Requirements See summary
Start Date 1990-01-01
Expiration Date 2013-07-01

Maximum Incentive None

Program Administrator Illinois Department of Revenue
Date added to DSIRE 2003-01-16
Last DSIRE Review 2004-06-08

References DSIRE[1]


Proceeds from the sale of certain blends of ethanol and biodiesel are exempt from the Illinois state sales tax. As of July 1, 2003, there is a full tax exemption on proceeds from the sale of ethanol blends ranging from E-70 to E-90 (70-90% ethanol), and biodiesel blends exceeding B-10 (10% biodiesel). In addition, there is a 20% reduction in the tax applied to proceeds from sales of ethanol blends ranging from E-10 to E-70 (10-70% ethanol), and biodiesel blends ranging from B-1 to B-10 (1-10% biodiesel).

This incentive, which previously pertained solely to ethanol, was expanded to include biodiesel fuels in June 2003. The incentive will expire July 1, 2013.

At the same time, legislation was enacted in 2003 establishing the Illinois Renewable Fuels Development Program, which provides up to $15 million per year in grants for financial assistance for the construction, modification, alteration or retrofitting of plants in Illinois that have an annual production capacity of at least 30 million gallons of renewable fuel. Funding for this grant program comes from a decrease in the state's sales tax exemption on ethanol, from 30% to 20% of the state's 6.25% sales tax.

Authorities (Please contact the if there are any file problems.)

Authority 1: 35 ILCS 105/3-10
Date Effective 1990-01-01
Date Enacted 1989
Expiration Date 2013-07-01

Incentive Contact

Contact Name Public Information
Department Illinois Department of Revenue

Address Willard Ice Building
Address 2 101 West Jefferson Street
Place Springfield, Illinois
Zip/Postal Code 62702
Phone (800) 732-8866
Phone 2 (217) 782-3336


  • Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.[1]


  1. 1.0 1.1  "Database of State Incentives for Renewables and Efficiency (DSIRE)"