Iowa House Bill HF2343

Iowa 2025-2026 Regular Session

• Introduced: 2/9/26
• Refer: 2/9/26

Caption

A bill for an act relating to the excise tax on certain ethanol blended gasoline purchased exclusively for use in an implement of husbandry used in agricultural production.(Formerly HSB 561; See HF 2798.)

Impact

The introduction of HF2343 would significantly alleviate the financial burden on agricultural producers by removing the costs associated with excise taxes on a vital fuel source. Currently, the excise tax for ethanol blended gasoline ranges from 24 cents to 30 cents per gallon based on distribution percentages. The bill mandates an exemption certificate for purchases made under this exemption, which must be completed correctly and retained by the supplier for compliance and administrative purposes.

Summary

House File 2343 (HF2343) is a proposed legislation aimed at amending the excise tax laws regarding ethanol blended gasoline used in agricultural production. Specifically, the bill seeks to exempt ethanol blended gasoline that contains more than 85% ethanol by volume from excise tax when purchased for exclusive use in implements of husbandry. This exemption applies when the fuel is acquired at a terminal or refinery rack, effectively reducing the fuel costs for farmers and agricultural operators who rely on such fuel for their equipment.

Contention

There may be areas of contention surrounding HF2343, particularly regarding the implications of tax exemptions on state revenue. While supporters may argue that the bill provides necessary support for the agricultural sector—potentially enhancing productivity and maintaining competitiveness—critics could raise concerns about lost revenue for state budgets. Additionally, the requirement for an exemption certificate may raise compliance issues, as it imposes additional administrative tasks on both purchasers and suppliers.

Considerations

It is important to note that the bill also specifies consequences for improper use or disposal of exempt fuel, placing the liability for any excise tax due onto the purchaser should they fail to adhere to the stipulations outlined. This aspect adds a layer of responsibility that users of the exempt fuel must navigate to ensure they are not penalized under the law.