Iowa recently enacted a sales tax refund for qualified biodiesel producers. Under this provision, a biodiesel producer will be able to claim a refund for all or a portion of sales and use tax paid in Iowa based on the amount of biodiesel produced. The refund becomes effective January 1, 2012 and will be available for the calendar years 2012 through 2014.
In anticipation of this, the Iowa Department of Revenue has adopted a new regulation, Iowa Admin. Code r. 701—12.18, outlining how the Department will implement the refund; this regulation becomes effective December 7, 2011. In order to qualify for the refund, the producer must be engaged in the manufacture of biodiesel and registered with the United States Environmental Protection Agency as a manufacturer, the biodiesel must be for use in biodiesel blended fuel in accordance with Iowa Code section 214A.2, and the biodiesel must be produced in Iowa.