Iowa Economic Development Authority extends E15 tax credit expiration to 2028

On August 13, 2025, the Iowa Department of Revenue held a webinar to discuss significant legislative updates affecting tax policies in the state. The meeting highlighted key changes that will impact taxpayers, businesses, and local governance, emphasizing the ongoing evolution of Iowa's tax framework.

One of the most notable updates is the extension of the E15 promotion tax credit, which has been pushed back from its original expiration date of January 1, 2026, to January 1, 2028. This change, effective July 1, 2025, aims to support the promotion of E15 fuel, reflecting Iowa's commitment to renewable energy sources.

The meeting also covered House File 976, an omnibus bill that introduces several technical amendments to tax administration. A significant provision allows the release of confidential taxpayer information to law enforcement when there is evidence of willful tax noncompliance. This change aims to enhance cooperation between tax authorities and law enforcement, potentially increasing compliance and reducing tax evasion.

Additionally, the bill permits the sharing of taxpayer information with the state treasurer to assist in identifying owners of unclaimed property. This collaboration is expected to streamline the process of returning unclaimed assets to their rightful owners.

In terms of property tax, the legislation removes the Department of Revenue's authority to handle late property tax credit claims, shifting this responsibility to county treasurers. This change, effective July 1, 2025, is designed to simplify the process for taxpayers by allowing them to work directly with local officials.

The bill also clarifies the statute of limitations for appeals related to central assessments, ensuring consistency across different entities. Furthermore, it addresses the farm tenancy income tax exclusion by refining definitions and participation requirements, which could benefit agricultural stakeholders.

Changes to sales tax regulations were also discussed, including a simplification of the rules regarding when sales tax is due on building materials. Importantly, no substantive changes were made to the tax rates themselves, but the revisions aim to enhance clarity for taxpayers.

The meeting concluded with updates on motor fuel taxes, including provisions for recalculating rates in the event of errors and penalties for late filings. Additionally, the elimination of the inheritance tax was noted, along with adjustments to the taxation of lump-sum retirement income distributions, which are now exempt from Iowa taxation.

Overall, the legislative updates discussed during the webinar reflect a concerted effort by the Iowa Department of Revenue to streamline tax processes, enhance compliance, and support economic development initiatives. As these changes take effect, stakeholders across Iowa will need to stay informed to navigate the evolving tax landscape effectively.