Iowa Senate Bill SF2503

Iowa 2025-2026 Regular Session

• Filed/Introduced: 5/2/26
• Introduced: 5/1/26

Caption

A bill for an act modifying the sales or use tax refund for biodiesel production, and including retroactive applicability provisions.(Formerly SF 2275, SSB 3102.)

Summary

SF 2503 modifies Iowa’s biodiesel production sales or use tax refund. For biodiesel produced in Iowa from January 1, 2026 through December 31, 2026, the bill increases the refund rate from 4 cents per gallon to 5 cents per gallon. For biodiesel produced during calendar year 2027, the refund rate returns to 4 cents per gallon. The bill does not change the existing January 1, 2028 repeal date for the refund program. The bill also includes retroactive applicability, making the higher refund rate effective for biodiesel gallons produced on or after January 1, 2026. In practical terms, this means eligible biodiesel producers may receive an increased tax refund for production that occurred before enactment, subject to the bill’s terms and administration by the state tax system.

Impact

The bill amends Iowa Code section 423.4 governing the biodiesel production sales or use tax refund, temporarily increasing the per-gallon refund amount for one year and then restoring it to the prior level the following year. It affects biodiesel producers in Iowa by increasing the value of the tax incentive for 2026 production and preserving the existing sunset of the program in 2028. The retroactive clause may require recalculation or adjustment of refunds for qualifying production beginning January 1, 2026.

Sentiment

The available voting history suggests broad support, with the Senate Ways and Means report passing 15-0. No committee transcript is available, but the unanimous vote indicates the bill was viewed favorably and without recorded opposition in that committee setting. The bill’s limited, targeted tax adjustment and continuation of an existing incentive likely contributed to the positive reception.

Contention

No specific points of contention are documented in the provided materials. Potential areas of policy debate, if raised, would likely involve the cost of the tax refund to state revenues, the use of tax incentives to support biodiesel production, and the fairness of applying the increase retroactively. However, the available record does not show any named opponents or disputed amendments.