### Question
How is the "qualified cellulosic biofuel production" defined?


### Answer
The term **qualified cellulosic biofuel production** is defined in *26 U.S.C. § 40* as follows -

> any cellulosic biofuel which is produced by the taxpayer, and which during the taxable year—


(i) is sold by the taxpayer to another person—


(I) for use by such other person in the production of a qualified cellulosic biofuel mixture in such other person's trade or business (other than casual off-farm production),


(II) for use by such other person as a fuel in a trade or business, or


(III) who sells such cellulosic biofuel at retail to another person and places such cellulosic biofuel in the fuel tank of such other person, or


  

(ii) is used or sold by the taxpayer for any purpose described in clause (i)

#### Citation:
  - *26 U.S.C. § 40*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter A-Determination of Tax Liability > PART IV-CREDITS AGAINST TAX > Subpart D-Business Related Credits**

