Missouri extends wood energy tax credit program through 2028

Missouri Gov. Mike Parson on Oct. 5 signed House Bill 3. The legislation, in part, retroactively extends the state’s wood energy tax credit program from June 30, 2020, through June 30, 2028.

Missouri’s wood energy tax credit program was first established in the 1980s. The credit allows individuals or businesses that process residues produced by the state’s forestry industry into fuels to claim a state income tax credit of $5 per ton of processed material. To be considered an eligible fuel, the forest industry residues must have undergone thermal, chemical or mechanical processing sufficient to alter the residues into a fuel product. Wood pellet producers are among those eligible to claim the credit.

The credit can also be claimed by charcoal producers. A multiplier of four applies to credits claimed for charcoal production based on the amount of Missouri forest industry residues required to produce 1 ton of the prodcut, according to the Missouri Department of Natural Resources.

Missouri’s wood energy tax credit is capped at $6 million per fiscal year, subject to appropriations. A fiscal note published by the Missouri legislature in September notes that a total of $16.53 million has been redeemed through the wood energy tax credit program since fiscal year 2012.