State Excise Tax on fuels – (cents per gallon)1
Iowa motor fuel tax1
|
Tax
|
Gasoline, including ethenol blends E110 and E-14 |
30 |
Ethanol-blended gasoline2 (Fuel that has been blended with alcohol distilled from cereal grants, the end product containing at least 15 percent alcohol)
|
24.5 |
Aviation gasoline
|
8.0
|
SPECIAL FUEL
|
Tax
|
Diesel, including biodiesel B10 or lower |
32.5 |
Diesel B11³
|
29.8 |
Aviation jet fuel
|
5.0
|
Liquefied petroleum gas (LPG)
|
30.0
|
Compressed natural gas (CNG)
|
31.0
|
Liquid Natural gas (LNG) |
32.5 |
Other
|
Cubic Feet
|
Biofuel
(Defined as any oxygenated product derived from soybean oil, vegetable oil or animal fats that can be used in diesel engines or aircraft. Biofuel may be a blend of diesel fuel or it may be 100 percent soybean oil, vegetable oil or animal fats. Any biofuel product is taxed as special fuel.)
|
Per gallon rate is the same as the Motor Fuel Tax
|
1Rates as of July 1, 2023. Excise taxes are governed by Iowa Code 452A.3. Only dyed diesel fuel used for off-highway purposes and fuel exported outside of Iowa is sold tax-free.
2On July 1, 2023, the rates for ethanol-blended gasoline E-15 or higher changed – from 20.4 cents per gallon and 24.5 cents per gallon.
TIME-21: In 2008, an additional stream of state revenue was established through legislation creating a separate “TIME-21” Fund. This revenue is dedicated to maintenance and construction of certain primary highways in the state (60 percent), secondary roads (20 percent) and municipal streets (20 percent).
On July 1, 2023 the rate for diesel B11 or higher changed from 30.1 cents per gallon to 29.8 cents per gallon.
TIME-21 was a response to a “perfect storm” of factors threatening to create an estimated $267 million per year funding shortfall, hindering the state’s ability to adequately maintain and improve public roadways in Iowa. Those factors include a large and aging public roadway system, increasing demands on that system, flattening revenue, and increased construction costs.
The new revenue stream, which helps to address the projected shortfall, was created by changing certain vehicle registration fees and schedules, and by increasing trailer registration and title fees.
Total state funding
For state FY 2020, receipts into the RUTF and the TIME-21 fund are estimated to be $1.723 billion, comprised of $663 million in fuel taxes, $972 million in various registration fees, plus $88 million from miscellaneous other sources.
Primary Road Fund: Of the $1.883 billion in total state funding estimated for FY 2024, approximately $916 million is deposited into the Primary Road Fund. The Primary Road Fund is the major source of funding appropriated by the legislature on an annual basis for the Iowa DOT’s operations budget (there is also a smaller amount appropriated annually by the legislature from the Road Use Tax Fund for Iowa DOT operations to cover activities that go beyond support of just the primary road system). For FY 2024, approximately $356 million was appropriated from the Primary Road Fund for Iowa DOT operations budget.
The remaining balance of Primary Road Fund revenue (estimated to be $548 million in FY 2024) is then available for the Commission to program on road and bridge projects on the primary road system. In addition to the state funding from the Primary Road Fund, approximately $497 million of federal funding (described in the next section of the guidebook) is also available for the Commission to program on road and bridge projects on the primary road system.
Allocation of state funds: Iowa’s Five Year Transportation Improvement Program is developed yearly by the Iowa Transportation Commission with input from Iowa DOT staff and the public. It describes planned investments in Iowa’s multimodal transportation system, including aviation, transit, railroads, trails and highways. For FY 2024-2028, approximately $4.3 billion is forecast to be available for highway right of way and construction.
Current five-year program