Iowa-2015-HF2175-Introduced
House File 2175 - Introduced
HOUSE FILE
BY COMMITTEE ON
AGRICULTURE
(SUCCESSOR TO HSB 519)
A BILL FOR
1 An Act providing for tax credits and refunds relating to
2 renewable fuels including their component biofuels and
3 including effective date and retroactive applicability
4 provisions.
5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 DIVISION I
1 2 INCOME TAX ==== E=15 PLUS GASOLINE PROMOTION TAX CREDIT
1 3 Section 1. Section 422.11Y, subsection 9, Code 2016, is
1 4 amended to read as follows:
1 5 9. This section is repealed on January 1, 2018 2025.
1 6 Sec. 2. Section 422.33, subsection 11D, paragraph c, Code
1 7 2016, is amended to read as follows:
1 8 c. This subsection is repealed on January 1, 2018 2025.
1 9 Sec. 3. 2011 Iowa Acts, chapter 113, section 37, is amended
1 10 to read as follows:
1 11 SEC. 37. TAX CREDIT AVAILABILITY. For a retail dealer who
1 12 may claim an E=15 plus gasoline promotion tax credit under
1 13 section 422.11Y or 422.33, subsection 11D, as enacted in this
1 14 Act and amended in subsequent Acts, in calendar year 2017
1 15 2024, and whose tax year ends prior to December 31, 2017 2024,
1 16 the retail dealer may continue to claim the tax credit in the
1 17 retail dealer's following tax year. In that case, the tax
1 18 credit shall be calculated in the same manner as provided in
1 19 section 422.11Y or 422.33, subsection 11D, as enacted in this
1 20 Act and amended in subsequent Acts, for the remaining period
1 21 beginning on the first day of the retail dealer's new tax year
1 22 until December 31, 2017 2024. For that remaining period, the
1 23 tax credit shall be calculated in the same manner as a retail
1 24 dealer whose tax year began on the previous January 1 and who
1 25 is calculating the tax credit on December 31, 2017 2024.
1 26 DIVISION II
1 27 INCOME TAX ==== E=85 GASOLINE PROMOTION TAX CREDIT
1 28 Sec. 4. Section 422.11O, subsection 8, Code 2016, is amended
1 29 to read as follows:
1 30 8. This section is repealed on January 1, 2018 2025.
1 31 Sec. 5. Section 422.33, subsection 11B, paragraph c, Code
1 32 2016, is amended to read as follows:
1 33 c. This subsection is repealed on January 1, 2018 2025.
1 34 Sec. 6. 2006 Iowa Acts, chapter 1142, section 49, subsection
1 35 3, as amended by 2011 Iowa Acts, chapter 113, section 20, is
2 1 amended to read as follows:
2 2 3. For a retail dealer who may claim an E=85 gasoline
2 3 promotion tax credit under section 422.11O or 422.33,
2 4 subsection 11B, as enacted in this Act and amended in
2 5 subsequent Acts, in calendar year 2017 2024 and whose tax
2 6 year ends prior to December 31, 2017 2024, the retail dealer
2 7 may continue to claim the tax credit in the retail dealer's
2 8 following tax year. In that case, the tax credit shall be
2 9 calculated in the same manner as provided in section 422.11O
2 10 or 422.33, subsection 11B, as enacted in this Act and amended
2 11 in subsequent Acts, for the remaining period beginning on the
2 12 first day of the retail dealer's new tax year until December
2 13 31, 2017 2024. For that remaining period, the tax credit shall
2 14 be calculated in the same manner as a retail dealer whose tax
2 15 year began on the previous January 1 and who is calculating the
2 16 tax credit on December 31, 2017 2024.
2 17 DIVISION III
2 18 INCOME TAX ==== BIODIESEL BLENDED FUEL TAX CREDIT
2 19 Sec. 7. Section 422.11P, subsections 4 and 8, Code 2016, are
2 20 amended to read as follows:
2 21 4. For a retail dealer whose tax year is on a calendar year
2 22 basis, the retail dealer shall calculate the amount of the tax
2 23 credit by multiplying a designated rate by the retail dealer's
2 24 total biodiesel blended fuel gallonage as provided in section
2 25 452A.31 which qualifies under this subsection.
2 26 a. In calendar year 2012, in In order to qualify for the tax
2 27 credit, the biodiesel blended fuel must be classified as B=2
2 28 B=5 or higher.
2 29 (1) For biodiesel blended fuel classified as B=2 or higher
2 30 but not as high as B=5, the designated rate is two cents.
2 31 (2)b. (1) For biodiesel blended fuel classified as B=5
2 32 or higher but not as high as B=11, the designated rate is four
2 33 and one=half cents.
2 34 b. (2) In calendar year 2013 and for each subsequent
2 35 calendar year, in order to qualify for the tax credit, the
3 1 For biodiesel blended fuel must be classified as B=5 B=11 or
3 2 higher. The, the designated rate for the qualifying biodiesel
3 3 blended fuel is four and one=half seven cents.
3 4 8. This section is repealed January 1, 2018 2025.
3 5 Sec. 8. Section 422.33, subsection 11C, paragraph c, Code
3 6 2016, is amended to read as follows:
3 7 c. This subsection is repealed on January 1, 2018 2025.
3 8 Sec. 9. 2011 Iowa Acts, chapter 113, section 31, is amended
3 9 to read as follows:
3 10 SEC. 31. TAX CREDIT AVAILABILITY. For a retail dealer
3 11 who may claim a biodiesel blended fuel promotion tax credit
3 12 under section 422.11P or 422.33, subsection 11C, as amended
3 13 in this Act and amended in subsequent Acts, in calendar year
3 14 2017 2024, and whose tax year ends prior to December 31, 2017
3 15 2024, the retail dealer may continue to claim the tax credit in
3 16 the retail dealer's following tax year. In that case, the tax
3 17 credit shall be calculated in the same manner as provided in
3 18 section 422.11P or 422.33, subsection 11C, as amended in this
3 19 Act and amended in subsequent Acts, for the remaining period
3 20 beginning on the first day of the retail dealer's new tax year
3 21 until December 31, 2017 2024. For that remaining period, the
3 22 tax credit shall be calculated in the same manner as a retail
3 23 dealer whose tax year began on the previous January 1 and who
3 24 is calculating the tax credit on December 31, 2017 2024.
3 25 Sec. 10. EFFECTIVE UPON ENACTMENT. This division of this
3 26 Act, being deemed of immediate importance, takes effect upon
3 27 enactment.
3 28 Sec. 11. RETROACTIVE APPLICABILITY. Section 422.11P,
3 29 as amended in this division of this Act, and section 422.33,
3 30 subsection 11C, as amended in this division of this Act and
3 31 applied due to this division of this Act, apply retroactively
3 32 to tax years beginning on and after January 1, 2016.
3 33 DIVISION IV
3 34 SALES AND USE TAX ==== BIODIESEL PRODUCTION REFUND
3 35 Sec. 12. Section 423.4, subsection 9, paragraph e, Code
4 1 2016, is amended to read as follows:
4 2 e. This subsection is repealed on January 1, 2018 2025.
4 3 DIVISION V
4 4 FUTURE REPEALS
4 5 Sec. 13. Section 422.11O, subsection 5, Code 2016, is
4 6 amended to read as follows:
4 7 5. a. A retail dealer is eligible to claim an E=85 gasoline
4 8 promotion tax credit as provided in this section even though
4 9 the retail dealer claims one or all of the following related
4 10 tax credits:
4 11 (1) The ethanol promotion tax credit pursuant to section
4 12 422.11N.
4 13 (2) The an E=15 plus gasoline promotion tax credit pursuant
4 14 to section 422.11Y.
4 15 b. (1) The retail dealer may claim the E=85 gasoline
4 16 promotion tax credit and one or more of the related tax credits
4 17 as provided in paragraph "a" for the same tax year.
4 18 (2) The retail dealer may claim the ethanol promotion
4 19 tax credit as provided in paragraph "a" for the same ethanol
4 20 gallonage used to calculate and claim the E=85 gasoline
4 21 promotion tax credit.
4 22 Sec. 14. Section 422.11Y, subsection 6, Code 2016, is
4 23 amended to read as follows:
4 24 6. a. A retail dealer is eligible to claim an E=15 plus
4 25 gasoline promotion tax credit as provided in this section even
4 26 though the retail dealer claims one or all of the following
4 27 related tax credits:
4 28 (1) The ethanol promotion tax credit pursuant to section
4 29 422.11N.
4 30 (2) The an E=85 gasoline promotion tax credit pursuant to
4 31 section 422.11O.
4 32 b. (1) The retail dealer may claim the E=15 plus gasoline
4 33 promotion tax credit and one or more of the related tax credits
4 34 as provided in paragraph "a" for the same tax year.
4 35 (2) The retail dealer may claim the ethanol promotion
5 1 tax credit as provided in paragraph "a" for the same ethanol
5 2 gallonage used to calculate and claim the E=15 plus gasoline
5 3 promotion tax credit.
5 4 Sec. 15. REPEAL. Any intervening provision effective prior
5 5 to the effective date of this division of this Act that amends
5 6 section 422.11O, subsection 5, or section 422.11Y, subsection
5 7 6, as amended in this division of this Act, is repealed, unless
5 8 that Act or another Act specifically provides otherwise.
5 9 Sec. 16. EFFECTIVE DATE. This division of this Act takes
5 10 effect January 1, 2021.
5 11 EXPLANATION
5 12 The inclusion of this explanation does not constitute agreement with
5 13 the explanation's substance by the members of the general assembly.
5 14 BIOFUELS TAX CREDIT AND REFUND EXTENSIONS. This bill
5 15 extends the expiration date of four biofuel tax programs from
5 16 January 1, 2018, to January 1, 2025, including three income tax
5 17 credits and one sales and use tax refund.
5 18 BIODIESEL FUEL TAX CREDIT == INCREASED TAX CREDIT RATE FOR
5 19 B=11 OR HIGHER. The bill increases the designated tax credit
5 20 rate for the sale of biodiesel blended fuel classified as
5 21 B=11 or higher from 4.5 to 7 cents per gallon, retroactively
5 22 applicable to tax years beginning on or after January 1, 2016.
5 23 BACKGROUND. A biofuel is a substance blended with motor fuel
5 24 (gasoline or diesel fuel) and includes either ethanol (ethyl
5 25 alcohol) or biodiesel (a substance derived from vegetable
5 26 oils or animal fats) meeting state standards (Code section
5 27 214A.2). A motor fuel blended with a biofuel is referred to
5 28 as a renewable fuel. The amount of the tax credit or refund
5 29 is claimed by a taxpayer on a tax or calendar year basis after
5 30 multiplying the total gallonage of a qualifying renewable fuel
5 31 or biofuel times a designated monetary rate.
5 32 CURRENT INCOME TAX CREDITS. The income tax credits may
5 33 be claimed by a retail dealer operating a retail motor fuel
5 34 site and the amount of each tax credit is based on the total
5 35 number of gallons of a renewable fuel sold. The E=15 plus
6 1 gasoline promotion tax credit requires an ethanol content of
6 2 between 15 and 69 percent per gallon and the designated rate
6 3 equals 3 cents except between June 1 and September 15 when
6 4 the designated rate increases to 10 cents. The E=85 gasoline
6 5 promotion tax credit requires an ethanol content of between
6 6 70 and 85 percent per gallon and the designated rate equals
6 7 16 cents. The biodiesel blended fuel tax credit requires a
6 8 biodiesel content of at least 5 percent per gallon (B=5) and
6 9 the designated rate equals 4.5 cents.
6 10 SALES AND USE TAX REFUND. The sales and use tax refund may
6 11 be claimed by a biodiesel producer who manufactures biodiesel
6 12 for use in biodiesel blended fuel. The amount of the refund
6 13 equals the total number of gallons of biodiesel produced during
6 14 each calendar year quarter multiplied by a designated rate
6 15 of 2 cents. However, a producer cannot claim the refund on
6 16 more than 25 million gallons produced at any one manufacturing
6 17 facility.
6 18 FUTURE REPEAL OF REFERENCES TO THE ETHANOL PROMOTION TAX
6 19 CREDIT. The bill amends Code sections creating the E=85
6 20 gasoline promotion tax credit and the E=15 plus gasoline
6 21 promotion tax credit by repealing references to another tax
6 22 credit referred to as the ethanol promotion tax credit claimed
6 23 by a retail dealer who attains a certain threshold number of
6 24 all biofuels sold during a determination period and which is
6 25 based on the number of gallons of pure ethanol sold during that
6 26 period. The amendments become effective on January 1, 2021,
6 27 which is the date that the ethanol promotion tax credit is due
6 28 to expire.
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