To help compensate for a shortage of diesel fuel in the wake of Hurricane Ida in Louisiana, the Internal Revenue Service has extended its relief measures basically allowing dyed diesel fuel to be temporarily sold and used for highway purposes.
This latest announcement extends the IRS relief, originally provided in IR-2021-176, through Sept. 30, 2021.
How does the dyed diesel fuel relief work?
In its original relief announcement on September 1, the IRS said it would not penalize taxpayers when dyed diesel fuel is sold for highway purposes or when it’s used on the highway during the period covered by the relief measure.
Dyed diesel fuel isn’t normally taxed since it’s intended for uses such as farming, home heating, and municipal bus fuel, which are exempt from excise taxes. The relief package temporarily allows road use of dyed diesel without penalty, as long as the seller or vehicle operator pays excise tax of 24.4 cents per gallon normally assessed to regular undyed fuel.
For details on reporting and paying excise tax, see IRS Publication 510, Excise Taxes.
Where is the dyed diesel fuel relief available?
The diesel fuel relief is available to taxpayers in these Louisiana parishes:
- Acadia
- Allen
- Ascension
- Assumption
- Avoyelles
- Beauregard
- Calcasieu
- Cameron
- East Baton Rouge
- East Feliciana
- Evangeline
- Iberia
- Iberville
- Jefferson
- Jefferson Davis
- Lafayette
- Lafourche
- Livingston
- Orleans
- Plaquemines
- Pointe Coupee
- Rapides
- St. Bernard
- St. Charles
- St. Helena
- St. James
- St. John the Baptist
- St. Landry
- St. Martin
- St. Mary
- St. Tammany
- Tangipahoa
- Terrebonne
- Vermilion
- Vernon
- Washington
- West Baton Rouge
- West Feliciana
For some Louisiana parishes, Tropical Storm Nicholas only added to the problems created by Hurricane Ida. So, the IRS has added the parishes of Acadia, Allen, Avoyelles, Beauregard, Calcasieu, Cameron, Evangeline, Jefferson Davis, Lafayette, Rapides, St. Landry, Vermilion, and Vernon parishes to the diesel fuel relief list covered by IR-2021-176.
Like the main list, the relief period for the additional parishes now spans from August 29 to September 30.
It should be noted, however, that the diesel fuel relief measure does not allow the road use of fuel that doesn’t comply with EPA regulations. Adulterated fuels—such as diesel with sulfur content above 15 parts-per-million—cannot be legally used in highway vehicles.
Source: IR-2021-187
Trussell Tax