Fuel

Yes. Claims must be filed within three years of the invoice date. In addition, claims should not be made for amounts under $60. If the $60 minimum is not met within the allowed time frames, a credit may be taken on the income tax return by using form IA 4136. A refund of less than $60 will be allowed if the claimant is not required to file an income tax return or if the type of refund is not allowed to be taken as a credit on an income tax return.

Not always. If you qualify, there are two options available where no refund permit is needed. These options are:

• You may purchase dyed diesel fuel tax-free. Since there is no tax on this purchase, there is no need for a refund permit.
• You can claim a credit on your income tax return. IA 4136 Computation of Iowa Motor Fuel Tax Credit (41-036)

Not unless asked to submit the invoices. You are required to keep them for three years.

Register using GovConnectIowa. The refund permit remains in effect until revoked, canceled, or until the permit becomes invalid.

You can claim a credit against your income taxes by completing the IA 4136 Computation of Iowa Motor Fuel Tax Credit (41-036) and attaching it to your year-end income tax return. Both individuals and corporations can take advantage of this method. However, the income tax credit is not available for refunds relating to casualty losses, transport diversions, pumping credits, blending errors, idle time, power takeoffs, reefer units, export by distributors, excess tax paid on blended fuel, and tax overpaid on blended fuel. If you are using diesel fuel for an exempt purpose, buy dyed fuel whenever possible. A credit can be claimed on an income tax return for a period up to three years.

The income tax credit cannot be claimed for any year in which a fuel tax refund claim has been filed, unless the refund claim was for casualty losses, transport diversions, pumping credits, blending errors, idle time, power takeoffs, reefer units, export by distributors, or tax overpaid on blended fuel.

Returns, schedules and reports are required to be filed electronically online through GovConnectIowa. View Filing Returns, Schedules, Reports, and Paying Taxes for more information.

The Iowa Transportation Commission develops the Iowa Transportation Improvement Program each year, which identifies transportation investments over a five-year period. Listings of county and city transportation projects are included in their respective programs and can be obtained by contacting the individual jurisdictions.

Before July 1, 2020

Tax rates for motor fuel and special fuel were based on a fuel distribution percentage formula that used gallon totals from the Iowa Fuel Tax Monthly Report. The use of that formula and the resulting tax rates were scheduled to expire after June 30, 2020, when the tax on all motor fuel would have been $0.30 per gallon and the tax rate for all diesel fuel would have been $0.325 per gallon.

After July 1, 2020

Beginning July 1, 2020, a fuel distribution percentage formula will continue to be used as a basis for the fuel tax rates for motor fuel and special fuel. Gallon totals used in the formula will come from the Retailers Fuel Gallons Annual Report.

Motor fuel forms and systems are being updated to accommodate the fuel tax rate change. Please refer to the fuel tax type of IDR Forms to retrieve the revised forms.

Claims for fuel tax refund must be calculated using the correct rates based on the date of purchase. The GovConnectIowa system will be updated and available to use. Separate refund claims must be filed for invoices dated for periods prior to July 1 and for periods starting on or after July 1.

Motor fuel and special fuel are exempt from sales tax when used on the highway or in watercraft or aircraft if the fuel tax has been paid and no refund of the fuel tax has been allowed. When a fuel tax refund is allowed, the sales tax is deducted from the refund unless it is used for a purpose that is exempt from sales tax. In some instances, the amount of sales tax that would be due may exceed the amount of fuel tax refund allowed. This can happen because the fuel tax rate is a flat amount per gallon and is not impacted by the price of the fuel. On the other hand, sales tax is based on the price paid for the fuel, so as the price goes up, the sales tax also goes up. If this situation occurs, taxpayers may elect to not claim the fuel tax refund, since if they did, they would owe the difference between the sales tax and the fuel tax refund. Dyed diesel would normally be subject to sales tax, unless the purchaser qualifies for a sales tax exemption.

No. Money collected from fuel tax is transferred to the Road Use Tax Fund, which is constitutionally protected and must be spent on roads and bridges.

Yes, there is an inventory tax for the fuel tax rate increases effective July 1, 2024 for Ethanol Blended Gasoline E-15 or Higher and Biodiesel B-11 to B-19. When a rate change triggers the inventory tax, the Department will provide separate instructions for filing the inventory tax.

Due to differences in tax rates from year to year these dates may not overlap July 1 of any year. In other words, these dates must fall on or between the time period from July 1 of a particular year to June 30 of the following year. If you have some invoices prior to and some after, separate claims must be filed.

To file idle time or power takeoff claims, you must have a pre-approved study on file with the Department explaining how you intend to compute the credit. For more information about idle time and power takeoff claims, call 515-242-6829 or email idrmotorfuel@iowa.gov. 

Please refer to the table at Iowa Tax/Fee Descriptions and Rates for a complete list of all fuel types and their corresponding tax rates by time period.

Iowa Department of Transportation, Motor Carrier Services, 515-237-3224

Iowa Department of Agriculture, Weights and Measures Division, 515-281-5716

Iowa Department of Natural Resources, 800-942-1000 or 515-281-8693

As part of the Department's modernization efforts, account and permit numbers were updated when they were transitioned into GovConnectIowa. 

• All taxpayers have been issued an IDR ID. 
• Current permit or account numbers can be located on the Summary tab when logged in to GovConnectIowa, or on recent correspondence from the Department.  
• Withholding Permits: Previously assigned 12-digit withholding numbers have been assigned a new 9-digit number. Both the old 12-digit number and the new 9-digit number will be accepted when filing, but the Department suggests using the 9-digit number when possible. 
• All previously assigned tax permit numbers will still be on file with the Department, and can be used when filing or verifying your account. 

Motor fuel and special fuel tax rates may change annually because they are based on fuel distribution percentages using the number of gallons of ethanol blended gasoline classified as E-15 or higher, or biodiesel blended gasoline classified as B-20 or higher, that are distributed in this state during the previous calendar year.

You must complete and return the permit application via GovConnectIowa if you wish to receive an Iowa fuel tax refund. Refunds cannot be applied for or issued until your application is approved.

No. Dyed diesel will remain exempt from fuel tax but may be subject to Iowa sales and use tax in the same way it always was.

Yes. A legislative review is required every five years.