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Texas Temporarily Suspends Restrictions on Use of Dyed Diesel

Tax Development Feb 23, 2021

Texas Temporarily Suspends Restrictions on Use of Dyed Diesel

To ensure the availability of reliable fuel sources for disaster relief, Texas has lifted state restrictions on the use of dyed diesel fuel, suspended requirements to pay the state motor fuels tax on dyed diesel fuel, and secured a temporary waiver from the Internal Revenue Service (IRS) to waive penalties for using dyed diesel fuel on Texas highways. If vehicles powered by dyed diesel fuel are used on highways, the operator or the person selling the fuel must pay the federal tax of 24.4 cents per gallon that is normally applied to diesel fuel for highway use. The state motor fuels tax of 20 cents per gallon is temporarily waived.

The IRS will waive penalties for failure to make semimonthly deposits of the federal tax. The IRS waiver covers the period of February 12, 2021 through February 26, 2021. The suspension of state restrictions for the on-highway use of dyed diesel fuel and the waiver of the requirement to pay state motor fuels taxes on dyed diesel is in effect from February 12, 2021 until February 26, 2021 (unless terminated by the Office of the Governor).


David Pustejovsky

Adina Christian

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