Iowa DOT considers increase in ethanol tax

By | March 05, 2009
The Iowa Department of Transportation is investigating ways to increase revenue for infrastructure repairs, and in doing so is considering increasing the state's E10 and E85 tax rates. Approximately $6 million could be garnered if the 19-cent-per-gallon (cpg) E10 and E85 fuels taxes were raised to 20 cpg, for example.

According to the Iowa Renewable Fuels Association, state E10 sales made up 75 percent of total in-state fuel sales in 2008, which is slightly higher than in 2007 and the same as in 2005. Still, IRFA Executive Director Monte Shaw said 75 percent E10 consumption was "likely" below the national average. "Iowa should not be satisfied with being below average in ethanol use," he said. In 2008, Iowa's gasoline sales volumes totaled 397.25 million gallons, while E10 sales were 1.19 billion gallons. Iowa's E85 sales in the third quarter of 2008 were also strong, with July through September sales hitting 2.21 million gallons, doubling 2007's third-quarter numbers.