FUELIowa Participates on Biofuels Tax Credit Advisory Panel

The Iowa Legislature has created an incentive based approach to drive the sales of biofuels in Iowa.  FUELIowa’s legislative team was integral in the creation of Iowa’s biofuels tax credit structure as a means to promote the sales of biofuels and avoid the pitfalls that accompany fuel mandates.  In 2006, House File 2754 was signed into law setting a goal for the state to replace 25 percent of the gasoline gallons consumed in Iowa with biofuels.

Since the enactment of House File 2754, the list of incentives supporting the sale of biofuels in Iowa has grown.  Currently, the following tax credits are available to support biofuels sales in Iowa: Ethanol Promotion Tax Credit; Biodiesel Blended Fuel Tax Credit (B5 and B11); E15 Promotion Tax Credit, E85 Promotion Tax Credit and; the Biodiesel Production Tax Credit.  These tax credits have been successful in serving their stated purpose, the promotion and increase in sales of biofuels.

In addition to creating incentives through fully-refundable income tax credits, the Iowa Legislature via House File 2754 required five year reviews of its biofuels tax credit program.  The advisory panel overseen by the Iowa Department of Revenue will review each tax credit and analyze its effectiveness towards achieving the goals of the Iowa Legislature.  Upon completion of the advisory panel’s review, a report will be presented to the 2020 Iowa General Assembly.  With tax credits a likely topic for discussion during the 2020 legislative session, the opportunity for the advisory panel to show the success Iowa’s biofuel tax incentive program has had in driving biofuel sales in Iowa is extremely timely.