Bills › 91st General Assembly
Modifying the sales or use tax refund for biodiesel production, and including retroactive applicability provisions
Sponsored by the Senate Ways and Means (successor To Ssb 3102) Committee
Topics:AgricultureTaxes
Where it is now
- Done: IntroducedJanuary 14, 2026
- Done: SubcommitteeFebruary 18, 2026
- Done: Senate committeeFebruary 11, 2026
- Stopped: Passes the SenateDied when the General Assembly ended
- Skipped: House committeeSkipped
- Done: Passes the HouseMay 2, 202683–2
- 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 will receive a higher tax refund for a short period starting in 2026. This refund is calculated by multiplying a specific rate by the total number of gallons they produce. After that period ends, the refund amount will go back to its original level.1
Read the official explanation
Beginning January 1, 2026, but before January 1, 2027, this bill increases the sales or use tax refund available to the producers of biodiesel from cents per gallon to cents per gallon. Beginning January 1, 2027, but before January 1, 2028, the bill reverts the refund amount back to cents per gallon of biodiesel produced. The amount of the refund is calculated by multiplying the designated rate (currently cents) by the total number of gallons of biodiesel produced by the biodiesel producer in this state. The bill does not change the repeal date of January 1, 2028. The bill applies retroactively to January 1, 2026, for gallons of biodiesel produced by a biodiesel producer in this state on or after that date.
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.3
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