Ethanol consumption in the United States has been substantially supported by the Renewable Fuel Standard, which is the federal biofuel usage mandate. Ethanol consumption also has been promoted at the state level. In Iowa for instance, the Iowa General Assembly authorized House File 2754 in 2006. This legislation established the goal that 25% of all petroleum used in the formulation of gasoline in Iowa be replaced by biofuels by 2020. To support this goal, several refundable tax credits were enacted for biofuel retailers. As of now, Iowa biofuel retailers have four tax credits available: The Ethanol Promotion Tax Credit, the E85 Gasoline Promotion Tax Credit, the E15 Plus Gasoline Promotion Tax Credit, and the Biodiesel Blended Fuel Tax Credit (IDR, 2014).
The Ethanol Promotion Tax Credit (EPTC) was first enacted January 1, 2009. EPTC replaced the Ethanol Blend Gasoline Tax Credit, which expired December 31, 2008. The EPTC rate received by retailers ranges from $0.08 to $0.04 per gallon.
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