HF 1053 (LSB 1653HV (2) 91)

HOUSE FILE 1053

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO HSB 237)

A BILL FOR

An Act relating to fuel taxation by extending tax credits for E-15 gasoline, and modifying the sales tax refund for biodiesel production.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 422.11O, subsection 5, paragraph b, Code 2025, is amended to read as follows:
   b.  This subsection is repealed January 1, 2026 2029.
    Sec. 2.  Section 422.11Y, subsection 4, paragraph b, Code 2025, is amended to read as follows:
   b.  The designated rate of the tax credit is nine cents, except that for calendar year 2028 the designated rate is four and one-half cents. 
    Sec. 3.  Section 422.11Y, subsections 7 and 9, Code 2025, are amended to read as follows:
   7.  Any credit in excess of the retail dealer’s tax liability shall be refunded, except any credit in excess of the retail dealer’s tax liability for calendar year 2028 shall not be refunded. In lieu of claiming a refund, if available, the retail dealer may elect to have the overpayment shown on the retail dealer’s final, completed return credited to the tax liability for the following tax year.
   9.  This section is repealed January 1, 2026 2029.
    Sec. 4.  Section 422.33, subsection 11D, paragraphs b and c, Code 2025, are amended to read as follows:
   b.  Any E-15 plus gasoline promotion tax credit which is in excess of the taxpayer’s tax liability shall be refunded as provided in section 422.11Y, or may be shown on the taxpayer’s final, completed return credited to the tax liability for the following tax year in the same manner as provided in section 422.11Y.
   c.  This subsection is repealed January 1, 2026 2029.
    Sec. 5.  Section 423.4, subsection 9, paragraph b, Code 2025, is amended to read as follows:
   b.  The amount of the refund shall be calculated by multiplying a designated rate by the total number of gallons of biodiesel produced by the biodiesel producer in this state during each quarter of a calendar year. The designated rate shall be four and one-half cents.
    Sec. 6.  2011 Iowa Acts, chapter 113, section 37, as amended by 2016 Iowa Acts, chapter 1106, section 3, and 2022 Iowa Acts, chapter 1067, section 57, is amended to read as follows:
   SEC. 37.  TAX CREDIT AVAILABILITY.  For a retail dealer who may claim an E-15 plus gasoline promotion tax credit under section 422.11Y or 422.33, subsection 11D, as enacted in this Act and amended in subsequent Acts, in calendar year 2025 2028, and whose tax year ends prior to December 31, 2025 2028, the retail dealer may continue to claim the tax credit in the retail dealer’s following tax year. In that case, the tax credit shall be calculated in the same manner as provided in section 422.11Y or 422.33, subsection 11D, as enacted in this Act and amended in subsequent Acts, for the remaining period beginning on the first day of the retail dealer’s new tax year until December 31, 2025 2028. For that remaining period, the tax credit shall be calculated in the same manner as a retail dealer whose tax year began on the previous January 1 and who is calculating the tax credit on December 31, 2025 2028.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to fuel taxation by extending the tax credit for E-15 gasoline and modifying the sales tax refund for biodiesel production.
   The bill modifies the E-15 gasoline tax credit by extending the repeal of the credit from January 1, 2026, to January 1, 2029. The bill reduces the tax credit from 9 cents per gallon to 4.5 cents per gallon in calendar year 2028, and makes the tax credit nonrefundable in calendar year 2028.
   The bill amends the Iowa Acts to ensure the availability of the E-15 gasoline tax credit for those retail dealers whose tax year does not align with the repeal date of the E-15 gasoline tax credit repeal date in the bill. 
   The bill increases the refund available to the producers of biodiesel from 4 cents per gallon produced to 4.5 cents per gallon produced.