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May 13, 2021

Responding to fuel supply issues, IRS won’t impose penalties on dyed diesel fuel sold for highway use in certain states, May 7-21, 2021

In response to recent disruptions in the fuel supply chain, the IRS has announced (IR-2021-108) that, effective May 7 through May 21, 2021, it will not impose a penalty when dyed diesel fuel is sold or used on the highway in: Alabama, Delaware, Georgia, Florida, Louisiana, Maryland, Mississippi, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia or the District of Columbia. The entity selling the fuel nonetheless must pay the 24.4-cents-per-gallon tax that is normally applied to diesel fuel for highway use. (Dyed diesel fuel is normally sold for uses exempt from excise tax, including for farming, home heating and local-government use.)