Following Governor Reynolds signature of House File 2128 on May 17, 2022, the Iowa Department of Revenue has released new guidance to explain this tax change, effective July 1, 2022, as it relates to the following:
- Iowa Fuel Tax Deduction for Blended Fuel Sales
This new deduction, added to Iowa Code section 452A.8, is intended to promote the use of biofuels by allowing a lower tax rate to be charged when the fuel is withdrawn from the terminal when it is known that the fuel is going to be blended into a biofuel with the lower tax rate after it has been withdrawn. The deduction is for gasoline or diesel fuel withdrawn from a terminal by a licensee to be blended with a biofuel after it is withdrawn from the terminal when the tax rate on the gasoline or diesel fuel exceeds the tax rate which would be due on the biofuel-blended fuel. This tax change is effective July 1, 2022.
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