Iowa Ethanol E-15 Fuel Tax Increases to $0.280 on July 1
Summary
Iowa fuel tax rates for Ethanol E-15 and Alcohol will increase from $0.265 to $0.280 per gallon on July 1, 2026. The increase results from a 9.4 percentage point rise in the ethanol distribution percentage, from 19.4% to 28.8%, which places the category into a different fuel tax rate bracket under the statutory formula in 2020 Senate File 2403. All other Iowa fuel tax rates—including gasoline, diesel, and biodiesel—remain unchanged.
“The fuel tax rate for fuel classified as E-15 or Higher, including Alcohol, will increase from $0.265 per gallon to $0.280 per gallon effective July 1.”
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What changed
Iowa's Department of Revenue has announced that the fuel tax rate for Ethanol E-15 (or Higher) and Alcohol will increase from $0.265 to $0.280 per gallon effective July 1, 2026. This change is triggered by the ethanol distribution percentage increasing from 19.4% to 28.8%, moving the category into a different statutory rate tier under 2020 Senate File 2403. Fuel distributors, ethanol producers, and blenders handling E-15 or higher products must apply the new rate to invoices dated on or after July 1, 2026, and file separate refund claims for periods before and after the effective date.
The updated rate specifically affects entities dealing in Ethanol E-15, Ethanol E-85, and Alcohol fuels. Gasoline, diesel, biodiesel, aviation fuels, LPG, LNG, CNG, hydrogen, and electric fuel rates remain unchanged. The Department has also updated the blended fuel sales deduction rate on its guidance page.
Archived snapshot
Apr 22, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Iowa Fuel Tax Rate Change Effective July 1, 2026
Tuesday, January 27, 2026
Des Moines, Iowa – Iowa Fuel Tax Rates for Alcohol and Ethanol E-15 (and Higher) will increase starting July 1, following a 9.4 percentage point increase in the ethanol distribution percentage last year. The increase is statutory, using the rates provided in 2020 Senate File 2403, and based on the 2025 Retailers Fuel Gallons Annual Report for the determination period beginning January 1, 2025, and ending December 31, 2025. All other fuel tax rates will remain the same. The ethanol E-15 or Higher distribution percentage increased from 19.4% to 28.8% and now falls into a different fuel tax rate category. The fuel tax rate for fuel classified as E-15 or Higher, including Alcohol, will increase from $0.265 per gallon to $0.280 per gallon effective July 1.
The Department has updated the deduction rate for blended fuel sales. View the Iowa Fuel Tax Deduction for Blended Fuel Sales for more information for how to calculate that deduction.
Please refer to the tables below for all applicable tax rates and their effective dates.
You can view the Iowa Fuel Tax Information page for additional information.
Rates Changing on July 1, 2026
| Fuel Type | Current Rate | New Rate
Effective 7-1-26 |
| --- | --- | --- |
| Alcohol | $0.265 | $0.280 |
| Ethanol Blended Gasoline E-15 or Higher | $0.265 | $0.280 |
Rates Not Changing on July 1, 2026
| Fuel Type | Current Rate |
|---|---|
| Gasoline | $0.300 |
| Ethanol Blended Gasoline E-10 to E-14 (Gasohol) | $0.300 |
| Diesel (including Biodiesel B-19 and lower) | |
| (Special Fuel Undyed) | $0.325 |
| Biodiesel B-20 or Higher Undyed | $0.295 |
| Aviation Gasoline | $0.080 |
| Aviation Jet | $0.050 |
| Liquefied Petroleum Gas (LPG) | $0.300 |
| Liquefied Natural Gas (LNG) | $0.325 |
| Compressed Natural Gas (CNG) | $0.310 |
| Hydrogen | $0.650 |
| Electric Fuel | $0.026 per kWh |
Claims for fuel tax refunds must be calculated using the correct rates based on the date of purchase. Separate refund claims must be filed for invoices dated for periods prior to July 1, as well as those dated on or after July 1.
Revised Iowa Fuel Tax forms for the period starting July 1, 2026 will be released soon on the Department's Tax Forms Index.
Media Contact
John Fuller, Public Information Officer
Email Address john.fuller@iowa.gov Phone(s) Primary (515) 318-8864
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