Effective July 1, 2016, fuel tax rates for Gasoline and Ethanol-Blended Gasoline changed as a result of a calculated change to the fuel distribution percentage. Effective July 1, 2018, the fuel tax rate for Gasoline changed again. Rates for all other fuel types were unchanged.
Resident and nonresident individuals, fiduciaries of estates and trusts, and C corporations may claim a tax credit on their income tax returns for fuel that was or will be used in unlicensed vehicles for non-highway purposes in the tax period.
A partnership, LLC, S corporation, estate, or trust with fuel used in unlicensed vehicles for nonhighway purposes during its tax period is eligible for a tax credit that is apportioned to the members. The pass-through entity must file the IA 4136 with its return. On Schedule K-1 or on an attachment to Schedule K-1, report the tax credit for each member and instruct the members to report the apportioned tax credit on line 6 of form IA 4136 and include it with their tax returns.
Include a copy of the IA 4136 and federal Form 4136 with your return.
If you filed a fuel tax refund claim during the tax year, you cannot also claim a Fuel Tax Credit; your refund permit will become invalid if you claim a Fuel Tax Credit. However, the Fuel Tax Credit is not available for casualty losses, transport diversions, idle time, pumping credits, off-loading procedures, reefer units, blending errors, power takeoffs, export by distributors, or tax overpaid on blended fuel. A refund can be claimed for those reasons alongside the Fuel Tax Credit.
Dyed diesel fuel is always sold free of Iowa fuel tax. No Fuel Tax Credit may be claimed for dyed diesel fuel.
All undyed special fuel used in watercrafts is eligible for the Fuel Tax Credit; however, gasoline used in a watercraft does not qualify for the tax credit unless the watercraft was used by a commercial fisher licensed and operating under an owner’s certificate for commercial fishing gear issued pursuant to Iowa Code section 482.7.