Alternative Fuel Tax

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Alternative fuels used as vehicle fuel are taxed as follows:

  • Compressed natural gas is subject to the state fuel excise tax of $0.31 per gasoline gallon equivalent, measured at 5.66 pounds (lbs.) or 126.67 cubic feet at a base temperature of 60 degrees Fahrenheit and a pressure of 14.73 lbs. per square inch;
  • Liquefied natural gas is subject to the excise tax of $0.325 per diesel gallon equivalent (DGE), measured at 6.06 lbs.;
  • Propane is subject to the excise tax of $0.30 per gallon;
  • E85 is subject to the excise tax of $0.290 per gallon;
  • B20 is subject to the excises tax of $0.295 per gallon;
  • B100 is subject to the excise tax of $0.325 per gallon;
  • Hydrogen is subject to the excise tax of $0.65 per DGE, measured at 2.49 lbs.; and
  • Effective July 1, 2023, electricity will be subject to the excise tax of $0.026 per kilowatt-hour of fuel delivered or placed into a battery or other energy storage device of an electric motor vehicle at any location in Iowa other than a residence.

(Reference Iowa Code 452A.2, 452A.3, and 452A.86)