Background And Issues On Certain Tax And Trade Alcohol Fuel Initiatives : Scheduled for a Hearing Before the House Committee On Ways And Means On February 1, 1990 Jcx-1-90
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40(b)(2)). The credit is equal to 60 cents for each gallon of alcohol used as fuel. The credit is scheduled to expire after December 31, 1992. The amount of any taxpayer's credit under section 40 is reduced to take into account any benefit received with respect to the alcohol under the special reduced excise tax rates for alcohol fuels mixtures or alcohol fuels (described in A., above). For purposes of the credit, the term alcohol includes methanol and ethanol, but does not include alcohol prod...uced from petroleum, natural gas, or coal (including peat), or alcohol with a proof less than 150. On November 20, 1989, the Treasury Department issued proposed regulations under Code section 40 providing that a product is considered to be a mixture of alcohol and gasoline or of alcohol and a special fuel if the product is derived from alcohol and either gasoline or a special fuel, even if the alcohol is chemically transformed in producing the product so that the alcohol is no longer present as a separate chemical in the final product.
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