In response to the recent fuel crisis, the IRS has just stated that there will be no penalty for colored diesel fuel being sold for use or on the highway in 12 states.
These states include: Alabama, Delaware, Georgia, Florida, Louisiana, Maryland, Mississippi, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and the District of Columbia. This declaration (IR-2021-108, 5/133, 2021), which is retroactive to May 7, 2021, remains in force until May 21, 2021.
Usually, colored diesel fuel is not taxed as it is sold for certain purposes that are exempt from excise duty, such as: B. to farmers for agricultural purposes, for heating purposes at home and to local authorities. Hence, the shutdown of the pipeline has brought temporary reparations to the average person traveling in their vehicles.
In particular, the special tax exemption is available to anyone who sells or uses colored diesel fuel for highway use. In the case of the operator of the vehicle in which the colored diesel fuel is used, the relief is only available if the motorist or the person selling that fuel pays the tax of 24.4 cents per gallon, which is generally on diesel fuel for motorway use is applied.
Have we heard the last word on this subject? We are not sure. The IRS says it will continue to monitor the situation and provide additional assistance if necessary.