The Wood Energy Tax Credit allows individuals or businesses processing Missouri forestry industry residues into fuels a state income tax credit of $5 per ton of processed material (e.g., wood pellets). A multiplier of 4 applies to charcoal, based on the amount of Missouri forest industry residue required to produce one ton of charcoal. Any amount of credit exceeding the tax due by a company in the year of production may be carried over to a subsequent taxable year, not to exceed four years. A credit earned under this program may also be transferred to third parties for use within this five-year period. To be considered an eligible fuel, forestry industry residues must have undergone some thermal, chemical or mechanical processing sufficient to alter the residues into a fuel product. In 2014, S.B. 729 extended the tax credit to June 30, 2020, established an annual cap of $6 million per fiscal year, and added a requirement that an appropriation for the tax credits needs to be made before they are authorized.