Gasoline Excise Tax Rate Set To Decrease July 1, 2019

The Iowa Department of Revenue has notified FUELIowa staff of a change in the excise tax rate applied to gasoline.  On July 1, 2019, the Iowa motor fuel excise tax rate attributable to gasoline will decrease from $.307 cpg to $.305 cpg.  The excise tax rate change is exclusive to gasoline that contains no ethanol.  All other motor fuel excise tax rates, including the excise tax rate applied to ethanol blended gasoline, will remain unchanged on July 1.

The Iowa Department of Revenue adjusts the excise tax rate differential between gasoline and ethanol blended gasoline using a formula drafted into the Iowa Code.  As ethanol blended gasoline gains market share in Iowa’s total gasoline pool, the $.02 cpg excise tax advantage available for ethanol blended gasoline is slated to decline.  When ethanol blended gasoline’s market share reaches 95 percent the rates for gasoline and ethanol blended gasoline even out at $.30 cpg.  Using data from the Iowa monthly motor fuel tax reports, the Iowa Department of Revenue estimates that ethanol blended gasoline’s market share sits between 60-65 percent.  The data contained in Iowa’s monthly motor fuel tax reports is provided by suppliers, blenders, importers, and restrictive suppliers.  In contrast with the data accumulated through the monthly motor fuel tax reports, Iowa’s Annual Retail Motor Fuel Gallons Report shows ethanol blended gasoline’s market share to be 87 percent.