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HF 2798

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.

2025-2026 Regular Session

HF 2798 would modify Iowa’s excise tax treatment of ethanol blended gasoline used exclusively in implements of husbandry, potentially creating a targeted exemption or relief for fa

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Bill Summary · HF 2798

Summary of HF 2798 (2025-2026) – Iowa

Purpose and intended effect

HF 2798 seeks to modify the Iowa excise tax treatment of certain ethanol blended gasoline (E10+ blends) that are purchased exclusively for use in an implement of husbandry (IoH) used in agricultural production. The bill’s stated aim is to adjust the tax treatment to reflect the vehicle/operational use of ethanol blends when consumed specifically in farm equipment, potentially providing a tax relief or exemption pathway for agricultural producers.

Key provisions and changes (as introduced)

  • Exemption/credit framework: The bill outlines a structure related to the excise tax on ethanol blended gasoline used in implements of husbandry. It is positioned as an adjustment to the current excise tax regime, with an emphasis on goods (ethanol blends) purchased exclusively for IoH use in agricultural production.
  • Applicability to ethanol blends: Applies to ethanol blended gasoline (gasoline containing ethanol) that is intended for and used in implements of husbandry. The emphasis is on the exclusive use in farming equipment rather than general consumer vehicles.
  • Governing rules and definitions: The bill would define “ethanol blended gasoline” and “implement of husbandry” for purposes of the excise tax treatment, clarifying the scope of covered purchases and ensuring consistent application.
  • Administrative/sourcing considerations: Likely includes provisions related to documentation, eligibility verification, and adherence to existing tax administration processes, ensuring that only qualifying purchases receive any modified tax treatment.

Note: The action history indicates the bill was introduced and placed on the Ways and Means calendar on May 1, 2026, suggesting that the bill may involve tax policy and budget considerations and could be subject to committee review and potential amendments, including fiscal impact analysis.

Who is affected

  • Primary beneficiaries: Iowa agricultural producers who purchase ethanol blended gasoline for use in implements of husbandry. If the bill creates an exemption or targeted relief, farm operators and agribusinesses using IoH equipment would be the direct beneficiaries.
  • Other affected parties: Vendors, fuel suppliers, and retailers who sell ethanol blended gasoline to IoH users may be impacted by any documentation or eligibility verification requirements. State revenue and tax administration departments would administer and monitor compliance.

Procedural and timeline considerations

  • Current status: Introduced and placed on the Ways and Means calendar (as of 2026-05-01). This suggests the bill will be considered with attention to its fiscal impact and revenue implications.
  • Next steps (typical legislative path): Committee hearings (likely within Ways and Means or a related committee), potential amendments, and votes in the Iowa House. If advanced, the bill would proceed to the Senate for consideration and potential further actions, including fiscal notes and cross-chamber negotiation.
  • Budget impact: As a tax-related measure, the bill would typically be accompanied by a fiscal note assessing effects on state revenue and any cost to administer the exemption or credit.

Potential impact and considerations

  • Economic impact: If enacted as an exemption or modified tax treatment, Iowa IoH users could realize lower fuel costs for essential farming operations, potentially supporting farm productivity and operating expenses.
  • Administrative impact: The bill would require clear definitions and documentation to prevent non-qualified use from receiving benefits, along with robust enforcement by tax officials.
  • Policy alignment: The proposal aligns with policies aimed at supporting agriculture and rural economies, but would need to balance revenue implications with other state budgeting priorities.

If you would like, I can add a comparison to current Iowa excise tax rules on gasoline and ethanol blends, or provide a hypothetical fiscal note outline based on typical tax policy analyses.

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

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