Drake Software blog for tax pros, covering tax, IRS news, and more

No Dyed Fuel Penalty in Florida, IRS Says

No Dyed Fuel Penalty in Florida, IRS Says

The IRS last Friday announced that it would be waiving the penalty for using red-dyed diesel in highway vehicles in Florida until September 15. The press release came while Floridians prepared for the possibility that Hurricane Dorian would make landfall.

As of this afternoon, the now-Category 2 storm has yet to make landfall in the United States, but NPR reported that Dorian battered the Bahamas with rain and 185-mile-per-hour winds as a Category 5 over the weekend.

Despite the storm weakening over the past few days, it still represents a very real threat to residents in the Southeastern US. When the IRS announced the dyed-fuel waiver, they wanted “to minimize or prevent disruptions to the supply of fuel for diesel-powered highway vehicles.”

The IRS points out that dyed fuel is normally used for non-taxable purposes, like providing home heating and running farm equipment and government buses. According to Publication 510, Excise Taxes, a penalty—“the greater of $1,000 or $10 per gallon of the dyed diesel fuel”—comes into play if someone knowingly sells or uses dyed fuel for non-taxable purposes.

While the waiver suspends the penalty until September 15, the agency says the usual 24.4-cent-per-gallon tax on highway diesel will still apply. Other restricted fuels, however, are not covered by the waiver: “Diesel fuel with sulfur content higher than 15 parts-per-million may not be used in highway vehicles.”

The IRS ended the release by noting they would “provide additional relief as needed.”

Sources: IR-2019-148; “The Latest on Hurricane Dorian and Its Path

Ryan Norton

Whether designing superheroes, penciling caricatures, or just doodling, I always knew I was going to earn some sort of art degree while in college. That was my goal before I decided to trade Edgar Degas for Edgar Allan Poe during a Freshman English class. The BA in English soon morphed into a double-major in English and Philosophy, eventually becoming an MA in English. It only makes sense that I learned of a writing opportunity for a local marketing firm while teaching a first-year college English course. Before I knew it, I was writing and editing tax-related articles for Taxing Subjects, and this has been my home since 2014.