Fuel blending is the process of combining two or more ingredients to create a consumer-ready motor fuel having materially different chemical properties, uses, and market value. Companies engaged in qualifying fuel blending activities may qualify for the domestic production deduction of section 199 and need to be mindful of potential federal excise tax liability and penalties, as well as possible excise tax incentives, arising from this production activity.
Read a July 2016 report [PDF 115 KB] prepared by KPMG LLP: What’s News in Tax: Fuel Blending Revisited: Domestic Production Deduction and Excise Tax Considerations
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