Questions and Answers

Q. What exactly is the Iowa Road Use Tax Fund (RUTF)? Where does the money come from and where does it go?

A. Established in 1949 by the 53rd Iowa General Assembly, the RUTF has provided a stable and reliable revenue source for investing in the state's primary, secondary and municipal roadway systems.

After some off-the-top diversions, receipts into the fund are distributed according to a formula of 47.5 percent for the Primary Road System, 24.5 percent for the Secondary Road System, 8 percent for farm-to-market county roads, and 20 percent for city streets. Legislation that went into effect in 2003, which involved the transfer of jurisdiction of some roadways from the state to either a city or county government, requires a share of the Primary Road System funds (1.75 percent) to be paid to local governments.

For state fiscal year 2006, receipts into the RUTF totaled an estimated $1.101 billion. This represents $431.1 million in fuel taxes, $407.2 million in registration and other miscellaneous fees, $220.1 million in use tax on the purchase of motor vehicles, $21.3 million from underground storage tank fees, $11.4 million from driver licenses, and $10 million in interest.

The mean state tax rate for regular gasoline amongst all states during 2005 was 20.3 cents. Iowa's gross motor fuel tax collections totaled $443.1 million in 2005. Iowa ranked 30th in the nation during 2005 in gross fuel tax collections.