New Iowa Ethanol Promotion Credit
By: Charles L. Telk Jr., CPA, Senior Tax Adviser | email
Form IA 137 is used to compute the ethanol promotion tax credit. This form and credit are quite confusing, but beginning January 1, 2009 an ethanol promotion tax credit is available to taxpayers who: are retail dealers of ethanol blended gasoline, and who operate motor fuel pumps at an Iowa retail motor fuel site. Note that for this credit, a tank wagon is considered a fuel site.
A key factor to determining the credit is the bio-fuel threshold percentage. The threshold percentage for those dealers with less than 200,000 gallons of fuel sold is 6% and this rises to 10% for those dealers that exceed 200,000 gallons of fuel sold. For fiscal year taxpayers, the fuel sold from January 1, 2009 through the end of your fiscal year will be annualized for purposes of the bio-fuels threshold percentage.
Sales of ethanol by type and bio fuels by type must be tracked by location, similar to the requirements for the ethanol pumping credit, and by fuel type. We will need total gallons sold of E-10, E-85, B2, B5, B10, B20, and a summary of other B gallons sold as well as total non-ethanol fuels sold and gasoline gallons sold. This information will be used to compute the credit. Please call us if you have any questions.
