The Iowa Senate has voted to significantly boost the tax break for E15 during the summer. Ethanol-blended fuel gets a three-cents-per-gallon break on state taxes, but if the bill becomes law that would swell in the summer to 10-cents-a-gallon for fuel with a 15 percent ethanol blend.
“This is a message that Iowans have a job to help educate our friends and family and colleagues around the country about the benefits of renewable fuels,” Senator Rob Hogg, a Democrat from Cedar Rapids, said during Senate debate of the bill.
The bill would extend all state tax breaks for producers and retailers of renewable fuels ’til 2020 and it would allow biobutanol to be classified as a renewable fuel.
“This is a significant piece of legislation to continue our leadership as a renewable fuels industry, to help meet our obligations to the environment, to wean ourselves from dirty oil,” Hogg said.
The bill passed the Senate on a 48-0 vote, but it could face questions in the Iowa House. House Speaker Kraig Paulsen, a Republican from Hiawatha, notes lobbyists for the state’s gas stations and convenience stores have raised questions about the different tax rates for E15, based on the season.
“There’s some concern with how the petroleum marketers would manage that,” Paulsen told reporters last Thursday. “Obviously we’re supportive of promoting ethanol and, in particular, I think moving to E15 is very helpful, obviously, to the ethanol industry of this state. We’ll just have to work through the details of the bill.”
The American Petroleum Institute is opposed to giving E15 a tax advantage at Iowa gas pumps. Lobbyists for Kum N Go, KWIK Trip, the Iowa Grocery Industry Association and the Petroleum Marketers and Convenience Stores of Iowa are all registered as undecided on the bill.