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HSB 561

A bill for an act relating to the excise tax on certain ethanol blended gasoline purchased exclusively for use in an implement used in agricultural production.

2025-2026 Regular Session

Iowa bill exempts farmers' ethanol-blended gasoline from state excise tax, reducing fuel costs for agricultural equipment while potentially decreasing highway infrastructure revenue.

Committee report approving bill, renumbered as HF 2343.
#agriculture #ethanol #excisetaxes #farming #fueltaxes #gasoline #processingandproduction #revenuedepartment #taxexemptions
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Bill Summary · HSB 561

Legislative bill overview

HSB 561 would establish or modify an excise tax exemption on ethanol blended gasoline when purchased exclusively for use in agricultural equipment and implements. The bill specifically targets fuel used in farm machinery rather than general vehicle use, creating a carve-out from Iowa's standard gasoline excise tax structure.

Why is this important

Iowa is a major agricultural producer where fuel costs significantly impact farm operating expenses. This tax exemption could reduce input costs for farmers, potentially affecting agricultural profitability and competitiveness. It also reflects Iowa's policy interest in supporting its ethanol industry and agricultural sector through targeted tax incentives.

Potential points of contention

  • Revenue impact: The exemption reduces state transportation funding unless offset by other revenue sources, raising questions about highway maintenance and infrastructure investment
  • Implementation complexity: Distinguishing between agricultural and non-agricultural use of the same fuel type creates enforcement challenges and potential for misuse
  • Fairness concerns: The exemption may be viewed as preferential treatment for one industry sector, raising equity questions about whether other industries deserve similar tax relief

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

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