This bill introduces a new section, 452A.16, which exempts the excise tax on ethanol blended gasoline that contains more than 85 percent by volume of ethanol. This exemption applies specifically when the gasoline is purchased at a terminal or refinery rack and is intended exclusively for use in agricultural production implements. Currently, the excise tax on ethanol blended gasoline classified as E-15 or higher is based on a distribution percentage and ranges from 24 to 30 cents per gallon, with provisions for refunds for certain exempt uses.

The legislation aims to support agricultural producers by reducing their fuel costs associated with the use of high-ethanol gasoline in farming equipment. By eliminating the excise tax for this specific category of fuel, the bill seeks to promote the use of renewable energy sources in agriculture and enhance the economic viability of farming operations in Iowa.