This bill introduces a new section to Iowa law that exempts ethanol blended gasoline containing more than 85 percent ethanol from the excise tax when purchased at a terminal or refinery rack specifically for use in implements of husbandry in agricultural production. The excise tax, which typically ranges from 24 to 30 cents per gallon for such fuels, will not be imposed or collected under these circumstances.

To ensure compliance, the bill mandates that purchasers of this exempt fuel must provide an exemption certificate issued by the Iowa Department of Revenue (IDR). This certificate must be complete, signed by the purchaser, and retained by the supplier for a minimum of three years. The IDR is tasked with disallowing sales of the exempt fuel unless proof via the exemption certificate is provided. Additionally, if the purchaser misuses the fuel, they will be held liable for the excise tax and must remit it directly to the IDR.