In 2019, the Iowa legislature enacted House File 767 to create a new excise tax on sales of “electric fuel,” or electricity dispensed into an electric vehicle (EV) for purposes of propelling the EV. This new tax takes effect July 1, 2023. Beginning July 1, owners of EV charging stations will be responsible for reporting and paying to the Iowa Department of Revenue two and six-tenths cents for each kilowatt hour ($0.026 per kWh) of electric fuel dispensed into an EV battery or energy storage device. This does not apply to electric fuel dispensed at residences.
The new tax requires two groups of EV charging station owners to obtain licenses and remit the tax: electric fuel users and electric fuel dealers.
An electric fuel user is a person who dispenses electric fuel from an EV charging station owned and controlled by the person into the battery or other energy storage device of an EV owned or controlled by the person. In other words, a business that owns EV charging stations to charge its own fleet of EVs is an electric fuel user.
An electric fuel dealer is a person who owns an EV charging station that dispenses electric fuel into the battery or other energy storage device of an electric motor vehicle owned or controlled by another person. In other words, a business that owns EV charging stations and lets others charge their EVs at the stations is an electric fuel dealer.
As noted above, the new tax does not need to be paid when EVs are charged at residences. EV owners do not need to obtain an electric fuel user or dealer license to charge their EV at their home or apartment. The Department has adopted administrative rules to implement this tax. The rules provide several examples to help EV charging station owners understand when a user or dealer license is needed.
Hotel A owns and operates an electric fuel charging station in its parking lot and offers electric fuel to its guests at no charge. Hotel A also owns an electric vehicle it uses as a shuttle for its guests and charges the vehicle at its charging station. Hotel A must obtain an electric fuel dealer’s license because it dispenses fuel to customers as well as an electric fuel user’s license because it charges its own vehicle at its charging station.
Hotel B hosts an electric fuel charging station in its parking lot and offers electric fuel to its guests for a fee. Hotel B owns an electric vehicle it uses as a shuttle for its guests and charges the vehicle at the charging station in its parking lot. The charging station in Hotel B’s parking lot is owned by Station Retailer C. Station Retailer C must obtain an electric fuel dealer’s license. Hotel B does not need to obtain an electric fuel license.
Homeowner D lists Homeowner D’s house on a short-term home rental online platform. Homeowner D has an electric fuel charging station installed in the garage attached to the house. Guest E agrees to rent Homeowner D’s house for a week. Guest E charges an electric vehicle using Homeowner D’s charging station. Homeowner D does not need to obtain an electric fuel license.
Person F owns ten houses. Person F only resides in one of the houses and uses the other nine as rental properties. Person F does not need to obtain an electric fuel dealer license for any of the ten houses Person F owns.
Person G operates a motor carrier business as a sole proprietor. Person G owns an electric vehicle and uses the electric vehicle for the business. Person G operates the business from a residence and charges the electric vehicle at Person G’s residence. Because Person G charges the electric vehicle at a residence, Person G does not need to obtain an electric fuel user license.
Utility A is a municipal utility, wholly controlled by a municipality in Iowa. Utility A owns electric vehicle charging stations and only charges its own fleet of vehicles or other municipally owned vehicles at the charging stations. Utility A does not need an electric fuel user license since such sale or dispensing of electric fuel is not subject to tax pursuant to Iowa Code section 452A.17(1)“a”(3).
Utility B is a municipal utility, wholly controlled by a municipality in Iowa. Utility B owns electric vehicle charging stations where it charges its own fleet of vehicles. Utility B also allows individuals or private businesses to charge electric vehicles at its charging stations. Because Utility B is selling or dispensing fuel for nonpublic purposes when individuals or private businesses use its charging stations, Utility B must obtain an electric fuel dealer license.
Registration is now available on GovConnectIowa. To register for an electric fuel user or dealer license, you will need to create a GovConnectIowa account if you do not already have one. After logging in, navigate to the I Want To… tab and select the action item in the Manage Tax Accounts section. It may take up to 14 days to receive your license number after applying.
Licensees are required to file an electric fuel excise tax return every six months. The first return for July 1 through December 31, 2023 will be due January 31, 2024. Returns must be filed and tax must be remitted through GovConnectIowa.
All charging stations owned by licensees will be tested once every two years by the Weights and Measures Bureau of the Department of Agriculture and Land Stewardship. The Weights and Measures Bureau may provide additional detail as they prepare to begin testing charging stations.
Licensed dealers and users of electric fuel may utilize the following methods to determine kilowatt-hours of electric fuel sold for reporting on the dealer or user’s return:
Electric meters on which only electricity sold as electric fuel is measured
Software included in a charging station that tracks kilowatt-hours that flow through the station
If neither of these methods are available, the dealer or user, prior to filing a return, must contact the department for approval to utilize an electricity study to calculate the number of kilowatt-hours used as electric fuel. This requirement is set forth in Iowa Administrative Code 701–262.4(1).
To request approval to utilize an electricity study to make this calculation, please send an email with your request to IDRMotorFuel@iowa.gov.
