Black Liquor Tax Credit

A term coined by the forest-products industry to describe an abusive subsidy scheme within the industry. Black liquor is a byproduct of creating wood pulp and is used as fuel. As part of the 2005 transportation and ethanol bill, the U.S. government created a tax credit designed to encourage companies to use biofuels by mixing them with fossil fuels (presumed to be their existing energy source). An extension of the bill in 2007 created a loophole whereby paper companies, who were already using a biofuel (black liquor) did the reverse of what the bill intended, adding diesel to their black liquor, to qualify for tax credits.

The paper companies' use of a biofuel/fossil fuel mixture then qualified them for the tax credit, violating the spirit of the bill but not violating the law and allowing them to claim several billion dollars in tax credits. The tax credit distorted global markets by reducing the price of some U.S. paper products and caused Canada to create a similar subsidy to remain competitive with U.S. forest-products companies. The tax credit was scheduled to expire at the end of 2009.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Black Liquor — A byproduct of wood pulping, used as a fuel. In April 2008, The Times explained how U.S. paper producers have benefited from a subsidy aimed at promoting the use of alternative fuels: For decades, pulp companies have burned a wood byproduct… …   Dictionary of unconsidered lexicographical trifles

  • Fuel Tax Credit — A federal subsidy that allows businesses to reduce their taxable income dollar for dollar based on specific types of fuel costs. There are several types of fuel credits. For example, a 2005 fuel credit to companies that produce biofuels provided… …   Investment dictionary

  • Tax rates around the world — Taxation An aspect of fiscal policy …   Wikipedia

  • Value added tax — Taxation An aspect of fiscal policy …   Wikipedia

  • Your Black Muslim Bakery — Infobox Company name = Your Black Muslim Bakery type = Private (defunct) foundation = 1968 in Santa Barbara, California location city = since 1971 in Oakland, California location country = United States location = 5832 San Pablo Avenue locations …   Wikipedia

  • United States — a republic in the N Western Hemisphere comprising 48 conterminous states, the District of Columbia, and Alaska in North America, and Hawaii in the N Pacific. 267,954,767; conterminous United States, 3,022,387 sq. mi. (7,827,982 sq. km); with… …   Universalium

  • education — /ej oo kay sheuhn/, n. 1. the act or process of imparting or acquiring general knowledge, developing the powers of reasoning and judgment, and generally of preparing oneself or others intellectually for mature life. 2. the act or process of… …   Universalium

  • New Zealand general election, 2008 — 2005 ← members 8 November 2008 (2008 11 08) …   Wikipedia

  • Gary Doer — Infobox Prime Minister honorific prefix = The Honourable name = Gary Albert Doer honorific suffix = MLA | caption = order = 21st office = Premier of Manitoba term start = October 5, 1999 term end = lieutenant governor = Peter M. Liba, John… …   Wikipedia

  • State of New York —     State of New York     † Catholic Encyclopedia ► State of New York     One of the thirteen colonies of Great Britain, which on 4 July, 1776, adopted the Declaration of Independence and became the United States of America.     BOUNDARIES AND… …   Catholic encyclopedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.