9/01/2021
The Internal Revenue Service will not impose a penalty when dyed diesel fuel is sold for use or used on the highway for the following parishes in the state of Louisiana in response to shortages of undyed diesel fuel caused by Hurricane Ida:
The Louisiana parishes are: Ascension, Assumption, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St. Charles, St. Helena, St. James, St. John the Baptist, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Washington, West Baton Rouge and West Feliciana.
This relief is effective as of Aug. 29, 2021 and will remain in effect through Sept. 15, 2021 and is available to anyone who 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 normally applied to diesel fuel for highway use. The IRS 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.
Dyed diesel fuel is not ordinarily taxed because it is sold for uses that are exempt from excise tax, such as to farmers for farming purposes, local governments' buses, and home heating.
This waiver does not apply to the penalty for using adulterated fuels that don't comply with EPA regulations. Diesel fuel with sulfur content higher than 15 parts-per-million may not be used in highway vehicles.