Motor Fuels Tax Minute, Episode 38: Dyed Diesel Fuel Requirements

In this week’s episode of Motor Fuels Tax Minute, our hosts give an overview of dyed diesel fuel requirements for federal tax purposes.

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Detailed Description of Weaver’s Motor Fuels Tax Minute, Episode 38

00:00:00

Emilda: Welcome to Weaver’s Motor Fuels Tax Minute, the vlog where we talk all things motor fuel. This week, Kelly will touch a little bit on dyed diesel fuel requirements for federal tax purposes.

00:00:12

Kelly: So dyed diesel fuel is one of those fuels that a lot of people just think it’s not subject to any tax. But what we know is, even if it’s not subject to the federal tax, as long as it meets certain specifications, it can still be subject to the federal LUST tax. It’s also important to keep in mind that you might be required to get registered in states based on selling or buying dyed diesel fuel, and even if you’re not subject to fuel tax in the states, you might be subject to sales tax. So just a little bit of back to the basics for everyone.

00:00:45

Leanne: Well, thank you, Kelly. That’s really interesting. And just to ask a quick question on that, maybe a clarifying question. It’s true that there are some mechanical dye requirements, right, for dyed diesel? So what somebody calls dyed diesel may not be dyed diesel if under the IRS rules. Would that be correct?

00:01:05

Kelly: Correct. That is absolutely correct. You can’t just name something and get the exemption. You’ve got to actually meet the specifications.

00:01:15

Leanne: So if it’s not dyed in the right way, then maybe it might be subject to the federal tax as well?

00:01:21

Kelly: You nailed it, Leanne. Absolutely.

00:01:25

Leanne: Well, I’m glad that I learned something. I hope everyone else did too.

Thank you for joining us on this episode of Motor Fuels Tax Minute. See you next time.