The intoxicating brew of black liquor and son of black liquor: Deciphering the tax planning, research, policy and financial statement implications of tax credits via financial reporting income tax disclosures

Beth B. Kern

Journal of Accounting Education, 2012, vol. 30, issue 1, 35-57

Abstract: In 2007, a change in the law regarding the alternative fuel mixture credit opened the door for paper mills to qualify a byproduct of paper manufacturing, black liquor, as a fuel eligible for the credit. The credit is a refundable credit of $0.50 per gallon. Paper mills can produce hundreds of millions of gallons of black liquor per year and qualified for the credit in 2009. In addition, in 2010 the IRS determined that these firms qualified for the cellulosic biofuels producer credit. Paper mill companies could amend their 2009 tax returns and swap their alternative fuel mixture credits for cellulosic biofuels producer credits worth $1.01 per gallon. The catch was that the alternative fuels mixture credit was refundable; the cellulosic biofuels producer credit was nonrefundable.

Keywords: Tax planning; Tax research; Tax policy; Accounting for income taxes; Tax credits (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joaced:v:30:y:2012:i:1:p:35-57

DOI: 10.1016/j.jaccedu.2012.06.014

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