Time is running out on ethanol tax break

(Courtesy Iowa Radio News) – Time is running out at the statehouse to extend a state tax break which makes ethanol-blended gasoline cheaper than pure petroleum. Jim McNulty at the Iowa Department of Revenue says the law which keeps the state gasoline tax two cents less per gallon for ethanol blends will expire at the end of June.

A bill under consideration in the Senate would extend that for another year. “It will be 21 cents a gallon for non-ethanol blended gasoline and 19 cents for ethanol blended gasoline,” McNulty says. “The schedule is already in place. We’ll continue that two-cent difference.”

But if the bill doesn’t pass, the tax will be 20 cents a gallon for both blended and unblended fuel. That would increase the amount money available to spend on road and bridge repairs across the state. “If everything went to 20 cents a gallon, if this didn’t pass, we’d be looking at 8-million dollars more for the Road Use Tax Fund,” McNulty says.

The tax break is part of a larger bill governing ethanol blending. The House passed the bill last week and a Senate panel took it up Monday.