IowaFarm equipment buyers could avoid tax on high-ethanol gasoline
HF 2798 was withdrawn; it proposed a tax exemption for certain high-ethanol gasoline bought exclusively for farm equipment, with certificate and repayment rules.
What it does
The proposal would exempt gasoline with more than 85 percent ethanol from excise tax when bought at a terminal or refinery rack exclusively for use in farm equipment.
Buyers would have to sign an exemption certificate, and suppliers would have to keep it for at least three years. The department would disallow sales without certificate proof.
If a buyer uses or disposes of certificate-backed fuel for another purpose, that buyer would be solely responsible for paying the excise tax directly to the department.
Argument forEligible farm fuel buyers could avoid paying the excise tax upfront on qualifying high-ethanol gasoline bought at a terminal or refinery rack.
Argument againstBuyers who later use or dispose of the fuel for another purpose could owe the excise tax themselves, even if the supplier did not collect it.
More detail
The proposal would exempt qualifying gasoline from the excise tax at purchase. It covers gasoline for use in farm 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 the stated farm use.
Buyers would have to document exempt purchases, and suppliers would have to keep the certificates. These rules apply to buyers and suppliers of fuel claimed under the proposed exemption. The buyer must sign a complete and correct certificate that meets the director’s requirements. The department would disallow sales without certificate proof. Suppliers would have to keep each certificate for at least three years.
A buyer who uses or disposes of the fuel for a nonexempt purpose would owe the excise tax directly to the department. The rule applies to the purchaser of fuel bought using an exemption certificate. The liability applies when fuel bought with an exemption certificate is used or disposed of in a nonexempt manner.
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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
- May 2Withdrawn.Latest
- May 2SF 2493 substituted.
- May 1Introduced, placed on Ways and Means calendar.Introduced
AgricultureTaxes & Budget