Iowa Fuel Excise Tax Set to Increase 10 Cents on Sunday

February 25, 2015 | Kristine A. Tidgren

Iowa Governor Branstad signed S.F. 257 into law today, raising the Iowa excise tax on fuel for motor vehicles (including gasoline and diesel fuel) by 10 cents per gallon. Iowans will likely face the increase by Sunday, the first day of the first month following the enactment of the law. The increase, the first one in Iowa since 1989, is expected to raise one billion dollars over five years to improve Iowa's aging roads and bridges. The bill, which passed the House by a vote of 53-46 and the Senate by a vote of 28-21, moved from first vote to law in the span of two days. Iowans will now pay a state tax of about 29 cents per gallon for ethanol blended and about 30 cents per gallon for non-ethanol blended motor vehicle fuel. Proponents of the law--including the Iowa Farm Bureau--have stressed the dire condition of Iowa's infrastructure. Critics have emphasized the negative impact this law will have on individual Iowans, particularly low-wage earners already struggling to support their families.