Form 4136

[Black Bart]

Refresher needed (I think):

The "dyed" fuel is the stuff that does not have any taxes paid on it to take the credit against and is not eligible for the credit. The "undyed" fuel does have taxes paid on it and is eligible for the credit. Is this right?

Diesel fuel -- is it dyed, undyed, (or both). Eligible?

[Jesse]

I believe you are correct, the dyed fuel is the untaxed fuel.

The undyed is taxed and therefore could be eligible for the off road tax credit on form 4136.

That is why there are BIG fines if you get caught with the dyed fuel in your highway use vehicle.

[FEDUKE404]

Dye is not good

I believe you are correct, the dyed fuel is the untaxed fuel.

The undyed is taxed and therefore could be eligible for the off road tax credit on form 4136.

That is why there are BIG fines if you get caught with the dyed fuel in your highway use vehicle.

I concur - once knew someone involved in testing for the presence of the dye in fuel.

That stuff can take a LOT of dilution and still show up.....creating a very bad day at the office for the person involved.

FE

[DaveO]

From Wikipedia

In United States of America, the Environmental Protection Agency mandates use of a red dye to identify high-sulfur fuels for off-road use. Solvent Red 26 is used in the United States as a standard, though it is often replaced with Solvent Red 164, similar to Solvent Red 26 but with longer alkyl chains. The Internal Revenue Service mandates use of the same red dyes, in fivefold concentration, for tax-exempt diesel fuels such as heating oil; their argument for the higher dye content is to allow detection even when diluted with "legal" fuel. Detection of red-dyed fuel in the fuel system of an on-road vehicle will incur substantial penalties.

Blue dyes are used for diesel ascribed to governmental and institutional vehicles, for the purpose of theft detection.

[AJsTax]

unless something

changed this year, the end user can not file for refund of taxes on off-road diesel fuel. Can on gasoline if used for a tax exempt purpose.

[Jesse]

Unless something new for 2009...

You can take the credit for the tax paid on diesel and gasoline that is used in off highway business use. We have many loggers in our area that use the diesel in bulldozers, timber harvesters and other earth-moving equipment.

Landscaping services would be another business that may use quite a bit of gasoline and diesel for off road purposes.

If you buy the dyed(nontaxed) diesel - no credit.
If you by the non-dyed(taxed) diesel - credit taken on Form 4136.

[FEDUKE404]

More..

Well, I've pretty well learned Wikipedia is not always the best source of information.

FWIW, many of the references here are to diesel fuel. And of course Form 4136 deals with more then diesel fuel.

It is my (limited!) understanding that there is/was a blue dye added to gasoline, so as to track those who tried to use non-taxed gasoline for something other than for off-the road purposes.

Such would include a farmer who has a large gasoline tank (dyed fuel) for tractors et al, and instead starts using that fuel in the family sedan. A similar scenario of course could exist for diesel fuel and the 18-wheeler caught at the roadside check with lots of dye in the tank.

But this has been an enlightening conversation!

FE