SF 2493 (LSB 5210SZ (1) 91)

SENATE FILE 2493

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO SF 2188)
(SUCCESSOR TO SSB 3025)

(COMPANION TO HF 2343 BY COMMITTEE ON TRANSPORTATION)

A BILL FOR

An Act relating to the excise tax on certain ethanol blended gasoline purchased exclusively for use in an implement of husbandry used in agricultural production.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  452A.16  Exempt fuel —— implements of husbandry.
   1.  The excise tax under section 452A.3 shall not be imposed or collected on ethanol blended gasoline formulated with more than eighty-five percent by volume of ethanol when purchased at a terminal or refinery rack exclusively for use in an implement of husbandry used in agricultural production.
   2.  A person who purchases fuel on which an excise tax is not collected in accordance with subsection 1 shall substantiate the purchase with an exemption certificate provided by the department. The exemption certificate must be complete and correct according to the requirements of the director, signed by the purchaser, and retained by the supplier. A supplier shall retain exemption certificates for at least three years.
   3.  The department shall disallow all sales of gallonage described in this section unless proof is established by an exemption certificate.
   4.  If a purchaser uses or disposes of fuel that was purchased using an exemption certificate pursuant to subsection 2 in a nonexempt manner, the purchaser is solely liable for the excise tax and shall remit the tax directly to the department.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   Under current law, the excise tax on each gallon of ethanol blended gasoline classified as E-15 or higher is based on the distribution percentage of those fuels compared to the distribution of all nonaviation gasoline motor fuel, and ranges from 24 cents to 30 cents. For motor fuel and undyed special fuel used for a variety of exempt purposes under Code section 452A.17, including in implements used in agricultural production, a person who pays the excise tax may claim a refund from the Iowa department of revenue (IDR).
   This bill exempts ethanol blended gasoline formulated with more than 85 percent by volume of ethanol from imposition and collection of the excise tax when purchased at a terminal or refinery rack exclusively for use in an implement of husbandry used in agricultural production.
   The bill requires a person who purchases fuel on which an excise tax is not collected in accordance with the bill to substantiate the purchase with an exemption certificate provided by IDR. The exemption certificate must be complete and correct according to the requirements of the director of revenue, signed by the purchaser, and retained by the supplier. A supplier must retain exemption certificates for at least three years. The bill requires IDR to disallow all sales of fuel described in the bill unless proof is established by an exemption certificate. If a purchaser uses or disposes of fuel that was purchased using an exemption certificate in a nonexempt manner, the purchaser is solely liable for the excise tax and is required to remit the tax directly to IDR.
   Under current law, IDR requires similar exemption certificates for tax-exempt sales of compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen, and electric fuel.