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SF 2275

A bill for an act modifying the sales or use tax refund for biodiesel production.

2025-2026 Regular Session

Increases Iowa biodiesel tax refund from 4 to 5 cents per gallon and extends its sunset from 2028 to 2031, boosting producer incentives.

Committee report approving bill, renumbered as SF 2503.
#biofuels #processingandproduction #salestaxes #taxrefunds #usetaxes
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WeVote Research Nonpartisan
Bill Summary · SF 2275

Summary: SF 2275 (2025-2026) – Iowa biodiesel production sales/use tax refund

Purpose and intent

  • Increase the sales or use tax refund available to Iowa biodiesel producers.
  • Specifically raises the refund rate from 4 cents per gallon to 5 cents per gallon.
  • Extends the repeal date of the refund from January 1, 2028 to January 1, 2031.

Key provisions

  • Revision to Code: Iowa Code 423.4, subsection 9, paragraphs b and e (as amended in 2026).
  • Calculation of refund:
    • The refund amount is calculated by multiplying a designated rate by the total number of gallons of biodiesel produced in Iowa during each calendar year quarter.
    • With the bill, the designated rate is set at 5 cents per gallon (up from 4 cents).
    • Example: Refund per quarter equals 0.05 dollars × total Iowa-produced biodiesel gallons in that quarter.
  • Duration/expiration:
    • The current repeal date for the biodiesel refund is moved from January 1, 2028 to January 1, 2031.
  • Administrative notes:
    • The explanation confirms the formula and the rate change, and documents the extended sunset date.

Who is affected

  • Directly affected: Biodiesel producers operating within Iowa, who would receive a higher per-gallon tax refund for biodiesel production.
  • Indirectly affected: The broader biodiesel industry in Iowa (e.g., suppliers, distributors, and potentially downstream users) due to the increased incentive for production.
  • State fiscal impact: The bill changes state tax refund expenditures (a higher per-gallon refund and a later sunset), which would affect the state’s sales/use tax revenue interactions and any budgetary planning tied to this incentive.

Procedural and timeline aspects

  • Legislative steps completed:
    • Introduced and referred to Ways and Means, with a subcommittee and committee process completed.
    • Committee report approved; bill subsequently renumbered as SF 2503.
  • Effective scope:
    • The refund rate increase and the later sunset date are set to take effect as specified in the amended code sections.
    • Repeal date extended to January 1, 2031, unless further legislative action revises it again.

Summary of impact

  • Fiscal: Increases the annual value of the biodiesel tax refund by raising the per-gallon rate by 1 cent and extending the program duration by three years.
  • Policy: Reinforces government support for biodiesel production in Iowa, potentially encouraging higher production volumes.
  • Administrative: Requires administration of the adjusted rate and confirmation of production gallons within each quarter for accurate refunds.

If you’d like, I can provide a plain-language comparison of the current law versus SF 2275, or a briefing on potential fiscal implications based on production scenarios.

Compiled from official sources — confirm details with the bill’s official record.

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