Modifying the sales or use tax refund for biodiesel production

Sponsored by the House Ways and Means (companion To Sf 2275 By Committee on Transportation) Committee, Rep. Megan Jones (R)

Topics:Agriculture Taxes

Same legislation: HF 2071, SSB 3102, SF 2275, SF 2503

Write your legislators about it

Official bill page Lobbyist declarations One-pager to print

Where it is now

Done: IntroducedJanuary 14, 2026
Done: SubcommitteeMarch 26, 2026
Done: House committeeApril 21, 2026
Done: Passes the HouseMay 2, 202683–2
Stopped: Senate committeeDied when the General Assembly ended
Next: Passes the Senate
Next: To the Governor
Next: Signed into law

Died when the session ended The 2026 session adjourned on May 3, 2026, the General Assembly’s last regular session. Bills that didn’t pass both chambers died. What’s a funnel?

What’s in it

AI summary People who make biodiesel in Iowa would receive a larger tax refund for the fuel they produce. The refund amount would increase from 4 cents to 5 cents for every gallon made. This program would also continue running until 2031 instead of ending in 2028.¹

Read the official explanation

This bill increases the sales or use tax refund available to the producers of biodiesel from 4 cents per gallon to 5 cents per gallon. The amount of the refund is calculated by multiplying the designated rate (currently 4 cents) by the total number of gallons of biodiesel produced by the biodiesel producer in this state. The bill changes the repeal date of the refund from January 1, 2028, to January 1, 2031.

Why it matters. Biodiesel producers in Iowa would receive an increased sales or use tax refund from four cents to five cents per gallon produced. This change extends the refund program through January 1, 2031, and is estimated to decrease revenue for the state's General Fund and the SAVE Fund by $1.1 million and $0.2 million for fiscal year 2027, $4.5 million and $0.9 million for fiscal year 2028, $8.4 million and $1.7 million for fiscal year 2029, $8.5 million and $1.7 million for fiscal year 2030, and $4.5 million and $0.9 million for fiscal year 2031.²

Full bill text³

Fiscal note

AI summary This bill increases the sales and use tax refund for biodiesel producers from four cents to five cents per gallon produced during calendar year 2026. It is estimated that this change will decrease fiscal year 2027 revenue to the General Fund by $1.7 million and to the SAVE Fund by $0.3 million.⁴

Read the fiscal note

Description

Senate File 2503 increases the sales and use tax refund available to biodiesel producers from four cents per gallon of biodiesel produced to five cents per gallon for calendar year 2026. The Bill applies retroactively to January 1, 2026.

Background

Under current law, biodiesel producers are eligible to receive a sales and use tax refund of four cents per gallon of biodiesel produced, up to a maximum of 25.0 million gallons per calendar year. This allows for a maximum annual refund of $1.0 million per biodiesel producer.

Assumptions

There are eight biodiesel producers in the State that receive a sales and use tax refund.
Future sales and use tax refunds for biodiesel producers are forecasted based on 2024 quarterly refund returns.
The refund rate change in the Bill will have no impact on the calendar year production schedules of biodiesel producers.
Biodiesel production is assumed to increase by 3.5% each year.
A biodiesel producer will not receive a refund on more than 25.0 million gallons of biodiesel produced each calendar year.
Sales and use tax refunds are claimed in the quarter after purchases are made.
Refunds prior to July 1, 2026, that are affected by the Bill will impact FY 2027.
Secure an Advanced Vision for Education (SAVE) refunds are 1.0% of taxable expenditures.
Sales and use tax refunds do not impact the Local Option Sales Tax (LOST).

Fiscal Impact

Senate File 2503 is estimated to decrease FY 2027 revenue to the General Fund by $1.7 million and to the SAVE Fund by $0.3 million.

Sources

Iowa Department of Revenue
Iowa Renewable Fuels Association
Legislative Services Agency calculations

Biodiesel Producers, Sales Tax Refunds · May 1, 2026
Biodiesel Producers, Sales Tax Refunds · April 23, 2026

Reading a fiscal note⁵

Iowa Code it changes

Amends§423.4

How the Code works⁶

Lobbying

10 for · 0 against · 10 undecided · Who →

Family tree

Study bill

SSB 3102Renumbered

91st General Assembly

HF 2071RenumberedHouse companion SF 2275Renumberedfrom SSB 3102 HF 2786Passed a chamberfrom HF 2071 SF 2503Cleared committeefrom SF 2275

Notes

The summary is written by an AI model from the official explanation. It can miss details; the explanation and the bill are what count. ↩
Written by an AI model from the official explanation and fiscal note only, for bills that passed a chamber, drew heavy lobbying or carry a large cost. It doesn’t weigh whether the bill is a good idea. ↩
The explanation is printed with the bill as introduced and written by the Legislative Services Agency, the Legislature’s nonpartisan staff. Amendments adopted later aren’t reflected in it. ↩
Written by an AI model from the newest fiscal note. It can miss details; the note itself is what counts. ↩
Fiscal notes are nonpartisan cost estimates from the Legislative Services Agency’s Fiscal Services Division. The newest is listed first. ↩
Code sections are read from the bill as introduced. Each links to every bill touching that chapter of the Iowa Code. ↩