• July 18, 2011

Iowa – Legislation Establishes New Biodiesel Production Credit

New Sales Tax Refund Becomes Effective January 1, 2012

The Iowa Legislature has created a new per-gallon production refund for biodiesel produced in the state of Iowa by a qualified manufacturer. A qualifying producer of biodiesel may apply quarterly for a refund of the amount of the sales and use tax imposed and paid upon purchases made by the producer. The per-gallon rates will be:
• 3 cents for calendar year 2012;
• 2.5 cents for calendar year 2013; and
• 2 cents for calendar year 2014.

The biodiesel producer is not eligible to receive a refund on more than 25 million gallons of biodiesel produced each calendar year at each facility where the producer manufactures biodiesel.

For corporate and personal income tax purposes, a subtraction adjustment is allowed for the amount of any biodiesel production refund, to the extent included in federal taxable income or adjusted gross income.

The refund provision will sunset on January 1, 2015.

If you would like additional information on this topic or have any questions, please contact the taxdesk@thesaltgroup.com