Businesses may claim a tax credit of $0.03 per gallon of bio-heating oil containing at least 5% biodiesel that is purchased for space or water heating between 2008 and 2018. The credit is capped at $500 or the total tax liability and must be claimed electronically with supporting documentation from the Maryland Energy Administration. Sole proprietorships, corporations, and other entities may qualify for the non-refundable credit.

1. Bio-Heating Oil Tax Credit
Businesses may claim a credit for each gallon of heating oil blended with biodiesel
purchased for space or water heating. For any tax year, the credit allowed under this
section may not exceed $500, or the state income tax for that tax year.
The credit is available for the tax years beginning on or after January 1, 2008, but before
January 1, 2018, and remains effective for 10 years, through June 30, 2018.
The credit may be taken against corporate income tax or personal income tax. Sole
proprietorships, corporations and pass through entities, such as partnerships, subchapter S
corporations, limited liability companies and business trusts may claim the tax credit.
To qualify for the credit:
The purchase of bio-heating oil must be for the purpose of space and water heating. Bioheating oil means heating oil that contains at least 5% biodiesel and is:
Derived from the U.S. Environmental Protection Agency (EPA) approved feedstocks;
or
Accepted under 42 U.S.C. 7545 (O) as per the U.S. EPA Renewable Fuel Standard 2
(RFS2) accompanying regulations under 40 C.F.R. Part 80 for diesel fuel
replacement.
How the credit is calculated:
A business that receives an initial credit certificate from the Maryland Energy
Administration (MEA) may claim a credit against the state income tax for a tax year in an
amount equal to three cents ($0.03) for each gallon of bio–heating oil purchased for space
or water heating.
If the credit is more than the tax liability, the unused credit may not be carried forward to
any future tax years.
Documentation required:
For taxable years beginning after December 31, 2012, this credit is available only with an
electronically-filed return. A copy of the certification by the MEA must be included with the
electronic return, and the. Form 500CR section of the return must be completed.

2. Contact:
Maryland Energy Administration
60 West Street, Suite 300
Annapolis, MD 21401
Phone: 410-260-7655
E-mail: meainfo@energy.state.md.us
McMillan Consulting
828A E. Baltimore St.
Baltimore, MD 21202
Phone: 410-775-6226
Web: http://mcmillancos.com
E-mail: info@mcmillancos.com
McMillan Consulting is not affiliated with the state of Maryland. This document is for
informational purposes. Contact us, the appropriate agency for this credit or your tax
professional for further assistance. You can view Maryland's tax credits by visiting
http://macadvises.net/mdtaxsignal.php and clicking on the MD Business Tax
Credits link. We can send you a hard copy of this or any of our info sheets for Maryland
tax credits.