Iowa Alternative Fuel Dealer
Ethanol Blend Retailer Tax Credit
A tax credit is available to retail service stations at which more than 60% of their total gallons of gasoline sold and tracked through metered pumps is blended with ethanol. Once station owners surpass the 60% threshold, they are eligible for a tax credit of $0.025 for every additional gallon of gasoline blended with ethanol and sold during the tax year, through December 31, 2008. Beginning January 1, 2009, an Ethanol Promotion Tax Credit will replace the current incentive for each gallon of ethanol sold. The Ethanol Promotion Tax Credit will provide a $0.065 tax credit to any retailer meeting the renewable fuel standard (RFS) schedule for a given year. For retailers within 2% and 4% of meeting the RFS schedule, the tax credit will be $0.045 and $0.025, respectively, for every gallon of ethanol sold. (Reference Iowa Code 422.11C, 422.11N, and 422.33)
E85 Retailer Tax Credit
A tax credit is available to retail stations dispensing E85 for use in motor vehicles in the amount of $0.25 per gallon sold in calendar year 2008, $0.20 per gallon for calendar years 2009 and 2010, and $0.10 per gallon in calendar year 2011. After 2011, the tax credit decreases by $0.01 per year and expires after December 31, 2020. Taxpayers claiming the E85 tax credit may also claim the tax credit available for retail ethanol blends for the same tax year and same gallon of fuel. (Reference Iowa Code 422.11O)
Biodiesel Tax Credit
Through December 31, 2011, retailers whose diesel sales are at least 50% biodiesel (with a minimum content of 2% biodiesel) are eligible for a $0.03 per gallon tax credit on each gallon of B2 or higher blends sold. (Reference Iowa Code 422.11P)
Biofuels Infrastructure Grants
The Renewable Fuel Infrastructure Program provides financial assistance to E85 and biodiesel distributors. Cost-share grants are available for retailers to upgrade or install new E85 or biodiesel infrastructure, up to 70% of the total cost of the project or $50,000, whichever is less. Applicants may also qualify for supplemental incentives to upgrade or replace an E85 fueling dispenser, up to 75% of the cost of making the improvement or $30,000, whichever is less. The supplemental incentive is available only to applicants who made the improvement no later than 60 days after the date of the publication in the Iowa administrative bulletin of the state fire marshal's order providing that a commercially available fueling dispenser is listed as compatible for use with E85 by an independent testing laboratory.
Biodiesel distributors may apply for a cost-share grant for infrastructure upgrades and installations at biodiesel terminal facilities. Facilities blending or dispensing B2 to B98 are eligible for up to 50% of the total project or $50,000, whichever is less. Facilities blending or dispensing B99 or B100 are eligible for up to 50% of the total project or $100,000, whichever is less. The Renewable Fuels Infrastructure Board was established under the guidance of the Iowa Department of Economic Development; this 11-member board has authority to determine the eligibility of applicants
(Reference House File 2689, 2008, and Iowa Code 15G.203-15G.204)
Point of Contact
Dick Vegors
Program Coordinator, Renewable Fuel Infrastructure Program
Iowa Department of Economic Development, Business Development Division
Phone (515) 242-4796
Fax (515) 242-4918
dick.vegors@iowalifechanging.com
www.iowalifechanging.com/business/renewablefuels.html
E85 Fuel Exclusivity Contract Regulations
Any motor fuel franchise contract entered into or renewed on or after May 30, 2006, must allow for the delivery of E85 at any time demanded by the motor fuel dealer or allow the dealer to purchase E85 from another source. If a contract is already in effect on May 30, 2006, and does not have an expiration date, the franchisor must provide for the delivery of E85 at times demanded by the franchisee or allow the franchisee to purchase those volumes of E85 at those times from another source. (Reference Iowa Code 323A)
Renewable Fuel Standard (RFS)
The goal of the Iowa RFS is to replace 25% of gasoline in the state with biofuels (ethanol or biodiesel) by January 1, 2020. One provision of the standard is to require retailers to sell a certain percentage of renewable fuels as part of their total gasoline sales. Both biodiesel and ethanol count towards meeting the RFS schedule as follows:
| Year: % Biofuel Use | Year: % Biofuel Use |
|---|---|
| 2009: 10% | 2014: 15% |
| 2010: 11% | 2015: 17% |
| 2011: 12% | 2016: 19% |
| 2012: 13% | 2017: 21% |
| 2013: 14% | 2018: 23% |
(Reference Iowa Code 422.11N)
Renewable Fuel Labeling Requirement
If motor vehicle fuel blended with a renewable fuel is sold from a motor vehicle fuel dispenser, the dispenser must have a decal affixed identifying the name of the renewable fuel. The decal may be different based on the type of renewable fuel used. For the purpose of this requirement, renewable fuel includes fuel blends of biodiesel and ethanol. If fuel blends containing more than 10% ethanol (E10) 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 if the decal appears clear and conspicuous to the consumer. The application must be made in writing to the Department. (Reference House File 2689, 2008, and Iowa Code 214A.16)
