IowaLaw exempts qualifying high-ethanol fuel for farm equipment from tax
Farm equipment operators can buy qualifying high-ethanol gasoline without state excise tax if they document the purchase and use the fuel only for agricultural production.
What it does
Qualifying high-ethanol gasoline bought at a terminal or refinery rack for farm equipment used in agricultural production is exempt from the state excise tax. Buyers must document the purchase and pay the tax if they use or dispose of the fuel in a way that does not qualify.
Argument forFarm operators could pay less tax on qualifying high-ethanol fuel bought for agricultural equipment, reducing the tax cost of those purchases.
Argument againstA buyer who uses or disposes of the fuel for a nonfarm purpose could owe the full excise tax directly to the state.
More detail
The law exempts certain fuel from the state excise tax. The exemption covers fuel bought exclusively for use in equipment used in agricultural production. The gasoline must contain more than 85 percent ethanol by volume and be bought at a terminal or refinery rack exclusively for use in farm equipment used in agricultural production. The buyer must provide a complete, correct, signed exemption certificate that meets the director's requirements. The supplier must keep it for at least three years, and the department disallows the sale without proof by certificate. If the buyer uses or disposes of the fuel in a way that does not qualify, the buyer alone owes the excise tax and must pay it directly to the department.
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Where it stands
- Introduced
- Passed 1st Chamber
- Passed 2nd Chamber
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Jun 1Signed by Governor Kim Reynolds.Became Law
- May 11Reported correctly enrolled, signed by President and Speaker, and sent to Governor.To Governor
- May 2Message from House.
- Vote recorded Shall the bill pass? Result: pass.Lower
- May 2Immediate message.
- May 2Explanation of vote.
- May 2Passed House, yeas 85, nays 1.Passed 2nd Chamber
- May 2Substituted for HF 2798.
- May 2Passed on file.
- Apr 22Read first time, referred to Ways and Means.Minor
- Vote recorded Shall the bill pass? Result: pass.Upper
- Apr 22Message from Senate.
- Apr 22Immediate message.
- Apr 22Passed Senate, yeas 44, nays 0.Passed 1st Chamber
- Apr 15Committee report, approving bill.Minor
- Apr 15Introduced, placed on Ways and Means calendar.Introduced
AgricultureTaxes & Budget