Iowa Laws and Incentives

Listed below are the summaries of all current Iowa laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

State Incentives

Ethanol Blend Retailer Tax Credit

The Ethanol Promotion Tax Credit is available to any fuel retailer for up to $0.08 per gallon of pure ethanol blended into gasoline, as long as the retailer sells a certain percentage of renewable fuels (ethanol and biodiesel) as part of their total motor fuel sales on a company-wide or a site-by-site basis. Retailers must meet the following annual renewable fuel goals to be eligible for the credit:

Calendar
Year
% Biofuel (retailers
selling >200,000
gallons of motor
fuel)
% Biofuel (retailers
selling <200,000
gallons of motor
fuel)
2017 21% 17%
2018 23% 19%
2019 25% 21%
2020 25% 25%

For retailers within 2% of meeting these goals, the tax credit will be $0.06 for every gallon of pure ethanol blended into gasoline sold. For retailers within 4% of meeting these goals, the tax credit will be $0.04 for every gallon of pure ethanol sold. The governor may adjust the percentages if certain flexible fuel vehicle registration targets are not met or if there is a shortage of biofuel feedstock. The tax credit expires December 31, 2020. (Reference Iowa Code 422.11N)

Point of Contact
Amy Harris
Administrator, Research and Analysis Division
Iowa Department of Revenue
Phone: (515) 281-0196
amy.harris@iowa.gov

Mid-Level Ethanol Blend Retailer Tax Credit

Retail stations dispensing mid-level blends of ethanol in gasoline between 15% (E15) up to 69% (E69) for use in motor vehicles may be eligible for a tax credit. Credit amounts vary by date: September 16 through May 31 the credit is equal to $0.03 per gallon and June 1 through September 15 the credit is equal to $0.10 per gallon. The tax credit expires December 31, 2024. (Reference Iowa Code 214A.1 and 422.11Y)

Point of Contact
Amy Harris
Administrator, Research and Analysis Division
Iowa Department of Revenue
Phone: (515) 281-0196
amy.harris@iowa.gov

E85 Retailer Tax Credit

Retail stations dispensing gasoline fuel blends of E85 (70%-85% ethanol) for use in motor vehicles may be eligible for a tax credit in the amount of $0.16 per gallon sold. The tax credit expires after December 31, 2024. Eligible taxpayers may also claim the Ethanol Blend Retailer Tax Credit for the same ethanol gallons and tax year. (Reference Senate File 2309, 2016 and Iowa Code 422.11O)

Point of Contact
Amy Harris
Administrator, Research and Analysis Division
Iowa Department of Revenue
Phone: (515) 281-0196
amy.harris@iowa.gov

Biodiesel Blend Retailer Tax Credit

Retailers selling biodiesel blends containing a minimum of 5% biodiesel (B5) are eligible for a state income tax credit of $0.045 per gallon of biodiesel sold through December 31, 2017, and $0.035 per gallon thereafter. Biodiesel blends containing a minimum of 11% biodiesel (B11) are eligible for a state income tax of $0.055 per gallon beginning January 1, 2018. The tax credit expires December 31, 2024. (Reference Iowa Code 422.11P)

Biofuel Infrastructure Grants

The Renewable Fuels Infrastructure Program provides financial assistance to qualified E85 or dual E15 and biodiesel retailers. Cost-share grants are available to upgrade or install new E85 or dual E15 and biodiesel infrastructure. Three-year cost-share grants are available for up to 50% of the total cost of the total project, up to $30,000, and five-year cost-share grants are available for up to 70% of the total cost of the project, up to $50,000.

Biodiesel distributors may apply for cost-share grants for infrastructure upgrades and installations at biodiesel terminal facilities. Facilities blending or dispensing blends ranging from 2% biodiesel (B2) to 98% biodiesel (B98) are eligible for up to 50% of the total project, up to $50,000. Facilities blending or dispensing B99 or B100 are eligible for up to 50% of the total project, up to $100,000.

The Renewable Fuels Infrastructure Board receives administrative support from staff within the Iowa Department of Agriculture and Land Stewardship and the 11-member board has authority to determine the eligibility of applicants. For more information, refer to the Renewable Fuels Infrastructure Program website.

(Reference House File 643, 2017, and Iowa Code 159A.13-159A.15)

Point of Contact
Paul Ovrom
Marketing and Renewable Fuels Program
Iowa Department of Agriculture and Land Stewardship
Phone: (515) 242-6239
Fax: (515) 281-6178
paul.ovrom@iowaagriculture.gov
http://www.iowaagriculture.gov/

Biodiesel Producer Tax Refund

A biodiesel producer may apply for a refund of Iowa state sales or use taxes paid on purchases. To qualify, the producer must be registered with the U.S. Environmental Protection Agency and any biodiesel produced must be used in biodiesel fuel blends. The refund amount is based on the total gallons of biodiesel produced in the state multiplied by the designated rate of $0.02. A biodiesel producer is only eligible to receive a refund for up to 25 million gallons of biodiesel produced during each calendar year through 2017. The producer must file refund claims with the Iowa Department of Revenue on a quarterly basis. Refunds received may not be included as income for Iowa individual and corporation income tax purposes. The incentive expires December 24, 2024. (Reference Iowa Code 423.4)

Alternative Fuel Production Tax Credits

The High Quality Jobs Program offers state tax incentives to business projects for the production of biomass or alternative fuels. Incentives may include an investment tax credit equal to a percentage of the qualifying investment, amortized over five years; a refund of state sales, service, or use taxes paid to contractors or subcontractors during construction; an increase of the state's refundable research activities credit; and a local property tax exemption of up to 100% of the value added to the property. For more information, refer to the High Quality Jobs Program website.

Point of Contact
Business Finance Program Coordinator
Iowa Economic Development Authority
Phone: (515) 725-3134
Fax: (515) 725-3010
businessfinance@iowa.gov

Idle Reduction and Natural Gas Vehicle (NGV) Weight Exemption

Any motor vehicle equipped with an auxiliary power unit (APU) or other idle reduction technology may exceed the gross, single axle, tandem axle, or bridge formula weight limits by up to 550 pounds (lbs.) to compensate for the weight of the technology. To be eligible for the weight exemption, the vehicle operator must be able to provide written proof or certification of the weight of the APU or idle reduction technology, and demonstrate or certify that the technology is fully functional at all times.

Furthermore, NGVs may exceed the weight limits by an amount equal to the difference of the weight of the natural gas tank and fueling system and the weight of a comparable diesel tank and fueling system. The NGV must not exceed a maximum gross vehicle weight of 82,000 lbs. (Reference House File 463, 2017, and Iowa Code 321.463)

Utility/Private Incentives

Residential Electric Vehicle Supply Equipment (EVSE) Rebate - Alliant Energy

Alliant Energy offers a $500 rebate to residential customers who purchase and install Level 2 EVSE. The EVSE must be purchased and installed between January 1, 2017, and December 31, 2017. For more information, including how to apply, see the Alliant Energy Electric Vehicle Level 2 Charger website.

Workplace and Public Electric Vehicle Supply Equipment (EVSE) Rebate - Alliant Energy

Alliant Energy offers a rebate to commercial and industrial customers who purchase and install Level 2 EVSE for use by their employees or the public. The rebate is $1,000 for the purchase of a single connector EVSE, and $1,500 for a dual connector EVSE. Rebates are available on a first-come, first-served basis. For more information, including eligibility requirements and how to apply, see the Alliant Energy Electric Vehicle Workplace Charger website.

Laws and Regulations

E85 Fuel Exclusivity Contract Regulations

Any motor fuel franchisor must provide for the delivery of E85 as requested by the motor fuel dealer or allow the franchisee to purchase E85 from another source. (Reference Iowa Code 323A)

Renewable Fuel Labeling Requirement

Biodiesel, biobutanol, and ethanol blend dispensers must be affixed with decals identifying the type of fuel blend. If fuel blends containing more than 10% ethanol are being dispensed, the decal must include the following statement: "For Flexible Fuel Vehicles Only." The Iowa Department of Agriculture and Land Stewardship (Department) may approve an application to place a decal in a special location on a pump with special lettering or colors that are clear and conspicuous to the consumer. The application must be made in writing to the Department. (Reference Iowa Code 214A.16)

Ethanol Blend Dispenser Requirement

An ethanol retailer selling a blend of at least 9% ethanol by volume must use gasoline storage and dispensing infrastructure that the Iowa Department of Natural Resources and state fire marshal have determined is compatible with the ethanol blend being dispensed. Exceptions may apply. (Reference Iowa Code 455G.31)

Biofuel Specifications

Ethanol-blended gasoline must conform to ASTM D4814, E85 must conform to ASTM D4806, and biodiesel-blended fuel containing at least 6%, but no more than 20%, biodiesel must conform to ASTM D7467. Additionally, biobutanol must be an agriculturally derived isobutyl alcohol that meets ASTM D7862 for butanol for blending with gasoline for use as a motor fuel. Gasoline blended with biobutanol must conform to ASTM D4814. The state defers to the U.S. Environmental Protection Agency for potential changes in specifications. (Reference Iowa Code 214A.2)

Biodiesel Fuel Use

The Iowa Department of Transportation (IDOT) may purchase biodiesel for use in IDOT vehicles through the biodiesel fuel revolving fund created in the state treasury. The fund consists of money received from the sale of Energy Policy Act of 1992 credits IDOT has banked and other income IDOT has obtained or accepted for deposit in the fund. (Reference Iowa Code 307.20)

Alternative Fuel Tax

Compressed natural gas used as a special motor fuel is subject to the state fuel excise tax of $0.31 per gasoline gallon equivalent, measured at 5.66 pounds (lbs.) or 126.67 cubic feet at a base temperature of 60 degrees Fahrenheit and a pressure of 14.73 lbs. per square inch. Liquefied natural gas is subject to the excise tax of $0.325 per diesel gallon equivalent, measured at 6.06 lbs. Liquefied petroleum gas (propane) is subject to the excise tax of $0.30 per gallon. E85 is subject to the excise tax of $0.290 per gallon. (Reference Iowa Code 452A.2 and 452A.86)

Alternative Fuel Vehicle Acquisition Requirements

At least 10% of new light-duty vehicles purchased by institutions under the control of the state fleet director, including the Iowa Department of Transportation, Board of Directors of Community Colleges, Board of Regents, Commission for the Blind, and Department of Corrections must be capable of operating on alternative fuels. Vehicles and trucks purchased and directly used for law enforcement and off-road maintenance work are exempt from this requirement. (Reference Iowa Code 8A.362, 216B.3, 260C.19A, 262.25A, 307.21 and 904.312A)

Alternative Fuel Vehicle (AFV) Conversion Registration

When a motor vehicle is modified to use a different fuel type or more than one type of fuel, the vehicle's registered owner must notify the county treasurer of the new fuel type or alternative fuel types within 30 days. If the vehicle uses, or may use, a special fuel, the county treasurer will issue a special fuel identification sticker. (Reference Iowa Code 321.41)

Low-Speed Vehicle Access to Roadways

Low-speed vehicles are only permitted to operate on roadways with posted speed limits of up to 35 miles per hour (mph) but may cross streets with posted speed limits greater than 35 mph. (Reference Iowa Code 321.381A)