SDFU President Urges Congress to Pass Ethanol Tax Credit Extensions
South Dakota Farmers Union (SDFU) President Doug Sombke is urging members of Congress to extend the 45 cents per gallon Volumetric Ethanol Excise Tax Credit (VEETC), the 54 cents per gallon ethanol tariff, and the cellulosic tax credit which are set to expire at the end of the year.
Rep. Earl Pomeroy, (D-N.D.), and Rep. John Shimkus, (R-Ill.), held a press conference March 25 to announce a piece of legislation that would extend ethanol tax credits and the ethanol tariff. 27 co-sponsors have signed on to extend the Volumetric Ethanol Excise Tax Credit (VEETC) and tariff on imported ethanol through 2015. It would also extend the Cellulosic Ethanol Production Tax Credit and the Small Ethanol Producers Tax Credit until Jan. 1, 2016.
“The expansion of the ethanol industry over the past decade has been enormous, thanks in large part to these tax credits,” Sombke said. “And for the industry to continue to grow the federal government must extend these credits. We need them extended to continue the progress the industry has already shown. Homegrown, clean and renewable ethanol creates jobs and helps us reduce our country’s dependence on foreign oil. It doesn’t make sense to eliminate the tariff and increase our dependence on yet another foreign source of fuel.”
If the tax credits are allowed to expire an immediate tax increase at the gas pump of $5.4 billion will occur in 2011.
“We simply can’t allow this to happen,” Sombke said. “Taxpayers are already struggling to make ends meet, and an increase of that magnitude will only hinder our country’s ability to climb out of the financial hole we’re in."
An Iowa State University research team concluded that U.S. ethanol policies saved the country’s taxpayers as much as $2.65 billion in 2007 alone because farmer support payments were reduced due to increased market for ethanol.
“South Dakota’s farmers need an expanded ethanol market and allowing the tax credit to expire will only hurt the price of our commodities,” Sombke said.
Sombke has sent a letter to Rep. Stephanie Herseth Sandlin encouraging her support of legislation to extend the VEETC credits, ethanol tariff, and cellulosic tax credit. Herseth Sandlin's office confirms the Congresswoman has signed on as an original co-sponsor of the bill.
"At a time when our economy is struggling, we cannot afford to let these tax incentives expire and stymie the growth we have seen in our ethanol industry," Pomeroy said. "This is a bipartisan bill that will promote not only economic growth, but also the transformation of our energy industry from one that is reliant on foreign oil to one that is based on energy that's grown in farm fields in the heartland of America."