Dyed fuel penalty in Texas waived by IRS

Local News

Source: AP Newsroom

AUSTIN, Texas — On Friday the Internal Revenue Service (IRS) announced it will not impose a penalty when dyed diesel fuel is sold for use or used on the highway in the State of Texas.

The IRS said this relief is retroactive to Feb. 12, 2021 and will remain in effect through Feb. 26, 2021.

This penalty relief is available to any person that sells or uses dyed fuel for highway use. In the case of the operator of the vehicle in which the dyed fuel is used, the relief is available only if the operator or the person selling the fuel pays the tax of 24.4 cents per gallon that is normally applied to diesel fuel for highway use, said the agency.

The IRS said they will not impose penalties for failure to make semimonthly deposits of this tax. IRS Publication 510, Excise Taxes, has information on the proper method for reporting and paying the tax.

Ordinarily, dyed diesel fuel is not taxed, because it is sold for uses exempt from excise tax, such as to farmers for farming purposes, for home heating use and to local governments for buses, said the news release.

The IRS said they are closely monitoring the situation and will provide additional relief as needed.

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