IL SB3131

Establishes an income tax credit of $1 per whole gallon for taxpayers that manufacture and sell renewable diesel in Illinois, effective for taxable years beginning January 1, 2027.

Credit is only available for renewable diesel that is both manufactured in Illinois and sold to a purchaser within Illinois; partial gallons do not qualify.

Taxpayers must maintain records documenting the number of whole gallons manufactured and sold in Illinois, plus verification that the product meets ASTM standards D975 or D396 for renewable diesel.

Excess credits that exceed annual tax liability may be carried forward and applied to tax liability in the following 10 taxable years, with earlier credits applied first.

Renewable diesel is defined as hydrocarbon fuel derived from biomass meeting ASTM standards, excluding co-processed fuel.