OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 165 Bill Analysis
134th General Assembly
Click here for H.B. 165’s Fiscal Note
Version: As Passed by the House
Primary Sponsor: Rep. McClain
Effective Date:
Mackenzie Damon, Attorney
SUMMARY
 Authorizes a nonrefundable tax credit for the retail sale of high-ethanol blend motor
fuel.
 Limits the tax credit to four years or to a total of $10 million, whichever occurs first.
DETAILED ANALYSIS
High-ethanol blend motor fuel tax credit
The bill authorizes a temporary, nonrefundable tax credit of 5₵ per gallon for the retail
sale of high-ethanol blend motor fuel, which contains between 15% and 85% ethanol, that is
sold and dispensed through metered pumps at a retail dealer’s retail service station during the
calendar year. The credit may be claimed by retail dealers either against the dealer’s income tax
or commercial activity tax (CAT) liability.1
Application process
To obtain the credit, a retail dealer must first apply to the Director of Development for a
tax credit certificate. The application must be filed within the first 20 days of January after the
calendar year in which the credit-eligible sales are made. Upon approval, the Director issues the
retail dealer a tax credit certificate indicating the amount of the credit and must notify the
Department of Taxation of each certificate issued. The Director may not issue more than a total
of $10 million in tax credits over the term of the credit (see “Term of credit,” below).2
1 R.C. 5747.74, 5747.98, 5751.55, and 5751.98.
2 R.C. 122.078(A), (B), (C), and (D)(1).
January 11, 2022
Office of Research and Drafting LSC Legislative Budget Office
Carry forward
The credit is nonrefundable, which means that the credit may not exceed a taxpayer’s
tax liability in any year. However, if the credit does exceed a taxpayer’s liability for a particular
year, the taxpayer may carry forward and apply the difference to a future tax liability. There is
no limit on the number of carryforward years.3
Term of credit
The credit is available only for retail sales made in the four calendar years after the year
that includes the credit’s effective date. For example, if the bill becomes effective in 2022, a
retail dealer may apply for a credit for retail sales occurring in years 2023, 2024, 2025, and
2026. If, however, the Director issues a total of $10 million in tax credits before the end of that
four-year period, retail sales occurring in the remainder of that period after that $10 million
maximum allowable credit amount has been reached will not qualify for the credit. A taxpayer
must claim the credit for the taxpayer’s taxable year or tax period that includes the last day of
the calendar year in which the credit-eligible sales are made.4
HISTORY
Action Date
Introduced 03-02-21
Reported, H. Ways & Means 06-23-21
Passed House (89-0) 11-17-21
H0165-PH-134/ts
3 R.C. 5747.74 and 5751.55.
4 R.C. 122.078(D)(2).
P a g e |2 H.B. 165
As Passed by the House


Statutes affected:
As Introduced: 5747.98, 5751.98
As Reported By House Committee: 5747.98, 5751.98
As Passed By House: 5747.98, 5751.98