Iowa Administrative Code › Agency 701 - Revenue Department › Title VI - Corporation Income Tax › Chapter 501 - Filing Returns, Payment of Tax, Penalty and Interest, and Tax Credits › Rule 701-501.19 - Ethanol Blended Gasoline Tax Credit

Current through Register Vol. 47, No. 3, July 24, 2024
Effective for tax years beginning on or after January 1,
				  2002, an ethanol blended gasoline tax credit may be claimed against a
				  taxpayer's corporation income tax liability for retail dealers of gasoline. The
				  taxpayer must operate at least one retail motor fuel site at which more than 60
				  percent of the total gallons of gasoline sold and dispensed through one or more
				  motor fuel pumps by the taxpayer in the tax year is ethanol blended gasoline.
				  The tax credit shall be calculated separately for each retail motor fuel site
				  operated by the taxpayer. The amount of the credit for each eligible retail
				  motor fuel site is two and one-half cents multiplied by the total number of
				  gallons of ethanol blended gasoline sold and dispensed through all motor fuel
				  pumps located at that retail motor fuel site during the tax year in excess of
				  60 percent of all gasoline sold and dispensed through motor fuel pumps at that
				  retail motor fuel site during the tax year.
For fiscal years ending in 2002, the tax credit is available
				  for each eligible retail motor fuel site based on the total number of gallons
				  of ethanol blended gasoline sold and dispensed through all motor fuel pumps
				  located at the taxpayer's retail motor fuel site from January 1, 2002, until
				  the end of the taxpayer's fiscal year. Assuming a tax period that began on July
				  1, 2001, and ended on June 30, 2002, the taxpayer would be eligible for the tax
				  credit based on the gallons of ethanol blended gasoline sold from January 1,
				  2002, through June 30, 2002. For taxpayers having a fiscal year ending in 2002,
				  a claim for refund to claim the ethanol blended gasoline tax credit must be
				  filed before October 1, 2003, even though the statute of limitations for refund
				  set forth in 701-subrule 55.3(5) has not yet expired.
EXAMPLE: A taxpayer sold 100,000 gallons of gasoline at the
				  taxpayer's retail motor fuel site during the tax year, 70,000 gallons of which
				  was ethanol blended gasoline. The taxpayer is eligible for the credit since
				  more than 60 percent of the total gallons sold was ethanol blended gasoline.
				  The number of gallons in excess of 60 percent of all gasoline sold is 70,000
				  less 60,000, or 10,000 gallons. Two and one-half cents multiplied by 10,000
				  equals a $250 credit available.
The credit may be calculated on Form IA 6478. The credit must
				  be calculated separately for each retail motor fuel site operated by the
				  taxpayer. Therefore, if the taxpayer operates more than one retail motor fuel
				  site, it is possible that one retail motor fuel site may be eligible for the
				  credit while another retail motor fuel site may not. The credit can be taken
				  only for those retail motor fuel sites for which more than 60 percent of
				  gasoline sales involve ethanol blended gasoline.
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.
Starting with the 2006 calendar tax year, a taxpayer may
				  claim the ethanol blended gasoline tax credit even if the taxpayer also claims
				  the E-85 gasoline promotion tax credit provided in rule
				  701-52.30 (422) for the same tax
				  year for the same ethanol gallons.
EXAMPLE: A taxpayer sold 200,000 gallons of gasoline at a
				  retail motor fuel site in 2006, of which 160,000 gallons was ethanol blended
				  gasoline. Of these 160,000 gallons, 1,000 gallons was E-85 gasoline. Taxpayer
				  is 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. Taxpayer may also
				  claim the E-85 gasoline promotion tax credit on the 1,000 gallons of E-85
				  gasoline sold.
(1)
Definitions.
The following definitions are applicable to this
				rule:
"Ethanol blended gasoline"
means the same as
				  defined in Iowa Code section
				  214A.1 as amended by 2006 Iowa
				  Acts, House File 2754, section 3.
"Gasoline"
means any liquid product
				  prepared, advertised, offered for sale or sold for use as, or commonly and
				  commercially used as, motor fuel for use in a spark-ignition, internal
				  combustion engine, and which meets the specifications provided in Iowa Code
				  section 214A.2.
"Motor fuel pump"
means a pump, meter, or
				  similar commercial weighing and measuring device used to measure and dispense
				  motor fuel for sale on a retail basis.
"Retail dealer"
means a person engaged in
				  the business of storing and dispensing motor fuel from a motor fuel pump for
				  sale on a retail basis, regardless of whether the motor fuel pump is located at
				  a retail motor fuel site including a permanent or mobile location.
"Retail motor fuel site"
means a geographic
				  location in this state where a retail dealer sells and dispenses motor fuel on
				  a retail basis. For example, tank wagons are considered retail motor fuel
				  sites.
"Sell"
means to sell on a retail
				  basis.
(2)
Allocation of credit to owners of a business entity.
If the
				taxpayer that was entitled to the ethanol blended gasoline tax credit is a
				partnership, limited liability company, S corporation, estate, or trust, the
				business entity shall allocate the allowable credit to each of the individual
				owners of the entity on the basis of each owner's pro rata share of the
				earnings of the entity to the total earnings of the entity. Therefore, if a
				partnership has an ethanol blended gasoline tax credit of $3,000 and one
				partner of the partnership receives 25 percent of the earnings of the
				partnership, that partner would receive an ethanol blended gasoline tax credit
				for the tax year of $750 or 25 percent of the total ethanol blended gasoline
				tax credit of the partnership.
(3)
Repeal of ethanol blended gasoline tax credit.
The ethanol
				blended gasoline tax credit is repealed on January 1, 2009. However, the tax
				credit is available for taxpayers whose fiscal year ends after December 31,
				2008, for those ethanol gallons sold beginning on the first day of the
				taxpayer's fiscal year until December 31, 2008. The ethanol promotion tax
				credit described in rule
				701-52.36 (422) is available
				beginning January 1, 2009, for retail dealers of gasoline.
EXAMPLE: A taxpayer who is a retail dealer of gasoline has a
				  fiscal year end of April 30, 2009. The taxpayer sold 150,000 gallons of
				  gasoline from May 1, 2008, through December 31, 2008, at the taxpayer's retail
				  motor fuel site, of which 110,000 gallons was ethanol blended gasoline. The
				  number of gallons in excess of 60 percent of all gasoline sold is 110,000 less
				  90,000, or 20,000 gallons. The taxpayer may claim the ethanol blended gasoline
				  tax credit for the fiscal year ending April 30, 2009, in the amount of $500, or
				  20,000 gallons times two and one-half cents.
This rule is intended to implement Iowa Code section
				  422.33 as amended by 2006 Iowa
				  Acts, House File 2754.