Bill Text: IA SF2223 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act providing for tax credits and refunds relating to renewable fuels including their component biofuels and including effective date and retroactive applicability provisions. (Formerly SF 2052; see SF 2309.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2016-04-06 - Returned to Committee. [SF2223 Detail]
Download: Iowa-2015-SF2223-Introduced.html
Senate File 2223 - Introduced SENATE FILE BY COMMITTEE ON ECONOMIC GROWTH (SUCCESSOR TO SF 2052) (COMPANION TO hf 2175 by committee on agriculture) 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: TLSB 5598SV (2) 86 da/rj 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 This section is repealed on January 1,20182025. 1 6 Sec. 2. Section 422.33, subsection 11D, paragraph c, Code 1 7 2016, is amended to read as follows: 1 8 c. This subsection is repealed on January 1,20182025. 1 9 Sec. 3. 2011 Iowa Acts, chapter 113, section 37, is amended 1 10 to read as follows: 1 11 SEC. 37.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 year2017 1 152024, and whose tax year ends prior to December 31,20172024, 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 31,20172024. 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 31,20172024. 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 1,20182025. 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 1,20182025. 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 year20172024 and whose tax 2 6 year ends prior to December 31,20172024, 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 31,20172024. 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 31,20172024. 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, inIn order to qualify for the tax 2 27 credit, the biodiesel blended fuel must be classified asB=2 2 28B=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 34b.(2)In calendar year 2013 and for each subsequent 2 35 calendar year, in order to qualify for the tax credit, the 3 1For biodiesel blended fuelmust beclassified asB=5B=11 or 3 2 higher. The, the designated ratefor the qualifying biodiesel 3 3 blended fuelisfour and one=halfseven cents. 3 4 8. This section is repealed January 1,20182025. 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 1,20182025. 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 1420172024, and whose tax year ends prior to December 31,2017 3 152024, 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 31,20172024. 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 31,20172024. 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 1,20182025. 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 claimsone 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)Thean E=15 plus gasoline promotion tax credit pursuant 4 14 to section 422.11Y.4 15b.(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 claimsone 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)Thean E=85 gasoline promotion tax credit pursuant to 4 31 section 422.11O.4 32b.(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. LSB 5598SV (2) 86 da/rj
