Off-road diesel, also known as red-dyed diesel or untaxed diesel, is cheaper than regular diesel. But you can’t use it in a road-going truck or car — it’s illegal. Off-road diesel is meant for non-highway use in vehicles like tractors, construction equipment, and generators. Using off-road diesel for trucks or cars and driving them on public roads can get you in trouble. Below are some of the main laws surrounding off-road diesel to help you avoid any such instance. But first, let’s discuss why you can’t use off-road diesel on the road.
Why Can’t You Run Off-Road Diesel on the Road?
Have you ever wondered why off-road diesel is cheaper? It’s because when you buy off-road diesel, you’re not paying federal and state highway taxes. When you use the same fuel on-road, you are committing tax evasion since the federal government takes 24.4 cents as highway tax per gallon of diesel. Not only this, but the states charge between 12 cents and 67 cents. You pay this tax at the pump, which is used for road maintenance. In case you fill your gas tank with off-road fuel, you’re not paying the fee to drive on the roads, making it illegal.
The Dyed Fuel Enforcement Program
In 1994, the U.S. government launched the dyed fuel enforcement program. Run by the IRS, this law fines people using dyed diesel illegally. As per this rule, you’ll have to pay $10/gallon or $1,000 for one violation, whichever is more. For example, if you have X (or any number up to 99) gallons of red fuel in your tank, you’ll have to pay $1000. It will be double for two such tanks and so on. All states except Alaska have this rule. Alaska has special regulations for red diesel, allowing people to avoid fines in some cases.
IRS inspectors have the right to check the fuel in licensed highway vehicles and fine the violators. Public school districts, government agencies, and nonprofit educational organizations can get a license from IRS and use dyed diesel on the road. Also, farm equipment, such as tractors, has to use off-road diesel within a distance of 25 miles from the registered address.
How to Avoid Buying Red Diesel Illegally
You can protect yourself from buying red diesel illegally by paying attention to pump labels and fuel. Ideally, buy off-road diesel from reputable and trusted suppliers. If you’re not sure about a pumping station and trying it for the first time, look for the label with a special inscription: “DYED DIESEL FUEL, NONTAXABLE USE ONLY, PENALTY FOR TAXABLE USE.” IRS makes it mandatory for all pumps dispensing any dyed fuel to have it. There is a similar rule concerning dyed kerosene.
Tax officials or police can detect off-road diesel by shining a flashlight into the gas tank, looking for the presence or any sign of red dye. Alternatively, they can lower a test strip into the tank to dip it in the fuel, which can detect even diluted off-road diesel. Try not to use it on the road. Contact us if you want to know more about off-road diesel or have any queries related to it. We will be happy to help.
