Effective for tax years beginning on or after January 1,
2006, a retail dealer of gasoline may claim an E-85 gasoline promotion tax
credit. "E-85 gasoline" means ethanol blended gasoline formulated with a
minimum percentage of between 70 percent and 85 percent of volume of ethanol,
if the formulation meets the standards provided in Iowa Code section
214A.2. For purposes of this
rule, tank wagon sales are considered retail sales. The credit is calculated on
Form IA 135.
(1)
Claiming the
credit.
a.
Amount of the
credit. The credit is calculated by multiplying the total number of
E-85 gallons sold by the retail dealer during the tax year by the following
designated rates:
|
Calendar years 2006, 2007, and 2008
|
25 cents
|
|
Calendar years 2009 and 2010
|
20 cents
|
|
Calendar year 2011
|
10 cents
|
|
Calendar years 2012 through 2024
|
16 cents
|
b.
Claiming the credit with other credits. A taxpayer may claim
the E-85 gasoline promotion tax credit even if the taxpayer also claims the
ethanol blended gasoline tax credit provided in rule
701-304.20 (422) for gallons
sold prior to January 1, 2009, or the ethanol promotion tax credit provided in
rule
701-304.39 (422) for gallons
sold on or after January 1, 2009, but prior to January 1, 2021, for the same
tax year for the same ethanol gallons.
c.
Refundability. Any credit
in excess of the taxpayer's tax liability is refundable. In lieu of claiming
the refund, the taxpayer may elect to have the overpayment credited to the tax
liability for the following tax year.
d.
Transferability. The
credit may not be transferred to any other person.
e.
Example. A taxpayer
operated one retail motor fuel site in 2008 and sold 200,000 gallons of
gasoline, of which 160,000 gallons was ethanol blended gasoline. Of these
160,000 gallons, 1,000 gallons was E-85 gasoline. Taxpayer may claim the E-85
gasoline promotion tax credit on the 1,000 gallons of E-85 gasoline sold during
2008. Taxpayer is also entitled to claim the ethanol blended gasoline tax
credit of two and one-half cents multiplied by 40,000 gallons, since this
constitutes the gallons in excess of 60 percent of the total gasoline gallons
sold for the 2008 tax year.
(2)
Fiscal year filers. For
taxpayers whose tax year is not on a calendar-year basis, the taxpayer may
compute the tax credit on the gallons of E-85 gasoline sold during the year
using the designated rates as shown above. Because the tax credit is repealed
on January 1, 2025, a taxpayer whose tax year ends prior to December 31, 2024,
may continue to claim the tax credit in the following tax year for any E-85
gallons sold through December 31, 2024. For a retail dealer whose tax year is
not on a calendar-year basis and who did not claim the E-85 credit on the
previous return, the dealer may claim the credit for the current tax year for
the period beginning on January 1 of the previous tax year until the last day
of the previous tax year.
See 701-subrule 501.30(2) for examples illustrating how this
subrule is applied.
(3)
Allocation of credit to owners of a business entity or to beneficiaries
of an estate or trust. If a taxpayer claiming the E-85 ethanol
promotion tax credit is a partnership, limited liability company, S
corporation, or an estate or trust electing to have the income taxed directly
to the individual, an individual may claim the credit. The amount claimed by an
individual must be based on the individual's pro rata share of the individual's
earnings of the partnership, limited liability company, S corporation, or
estate or trust.
This rule is intended to implement Iowa Code section
422.11O as amended by 2016 Iowa
Acts, Senate File 2309.
