The Internal Revenue Service (IRS), in response to continued shortages of undyed diesel fuel caused by Hurricane Irma, will extend its waiver of penalties for dyed diesel fuel, first announced in IR-2017-149, when such fuel is sold for use or used on the highway in the state of Florida.
This extension comes at the request of the state of Florida. The Environmental Protection Agency (EPA) granted a waiver for the state of Florida regarding use of Non-Road Diesel Locomotive and Marine Fuel, which was effective from Sept. 6 through Sept. 22, 2017. The EPA has extended that waiver through Oct. 6, 2017. Consistent with the EPA extension, this extension is effective from Sept. 6, through Oct. 6, 2017. Any dyed diesel fuel that is stored for distribution to retailers, wholesale purchasers, and consumers in the state of Florida prior to Oct. 6, 2017, may continue to be distributed and sold until the supply is exhausted.
Also, consistent with the EPA extension, this extension does not apply to use of adulterated fuels that do not comply with EPA regulations. Consequently, diesel fuel with sulfur content higher than 15 parts-per-million may not be used in highway vehicles.
This relief is only available provided the operator or the person selling the dyed diesel fuel pays the tax of 24.4 cents per gallon on any such fuel used on the highway. 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.