Diesel Fuel and Kerosene Excise Tax; Dye Injection

The previously approved regulations relate to the diesel fuel and kerosene excise tax and reflect changes made by the American Jobs Creation Act of 2004 (Act) regarding mechanical dye injection systems. Under the Act, diesel fuel and kerosene that are to be used in a nontaxable use must be indelibly dyed by use of a mechanical dye injection system that satisfies the requirements set forth in the regulations. However, Notice 2005-80 lifted the requirement for mechanical injection and because of this, there is currently no requirement in the regulations for pre-approval by the IRS to inject dye into exempt fuel. The statutory requirement remains codified until such time they are finalized or removed. The burden has been adjusted accordingly.

The latest form for Diesel Fuel and Kerosene Excise Tax; Dye Injection expires 2021-04-30 and can be found here.