Iowa Fuel Tax Rate Change Effective July 1, 2023

Wednesday - 06/28/2023

Based on the recently updated Retailers Motor Fuel Gallons Annual Report, the motor fuel tax rate for B-11 or Higher previously communicated on June 12, 2023 has changed.

Prior to July 1, 2020, the Iowa Department of Revenue used gallon totals from the Iowa Fuel Tax Monthly Report to determine tax rates for motor fuel and special fuel. Beginning July 1, 2020, the Department started using gallon totals from the Iowa Retailers Fuel Gallons Annual Report, resulting in tax rate changes to select fuel types.

Based on the data for the determination period beginning January 1, 2022, and ending December 31, 2022, the Biodiesel B-11 or Higher distribution percentage decreased from 57.75% to 54.33% and now falls into a different fuel tax rate category. The fuel tax rate for Biodiesel B-11 or Higher will decrease from $0.301 to $0.298 effective July 1, 2023. The Ethanol E-15 or Higher distribution percentage increased from 7.56% to 11.12% and now falls into a different fuel tax rate category. The fuel tax rate for Ethanol E-15 or Higher and Alcohol will increase from $0.240 to $0.245 effective July 1, 2023.

The Department has also updated the deduction rate for blended fuel sales. More information for how to calculate that deduction is available on the Department’s website, Iowa Fuel Tax Deduction for Blended Fuel Sales.

Please refer to the tables below for all applicable tax rates and their effective dates.

You can view the Iowa Fuel Tax Information page for additional information.

Claims for fuel tax refunds must be calculated using the correct rates based on the date of purchase. Separate refund claims must be filed for invoices dated for periods prior to July 1, as well as those dated on or after July 1.

Revised Iowa Fuel Tax forms for the period starting July 1, 2023 will be released soon on the Department's Tax Forms Index.

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