The governor wants state agencies to ease enforcement for 120 days, but federal penalty relief still requires IRS action.
OKLAHOMA CITY — Gov. Kevin Stitt is asking three state agencies to ease enforcement of restrictions on red-dyed diesel fuel for farmers and ranchers during harvest season. He also wants the Oklahoma Tax Commission to seek federal penalty relief.
In a Sept. 28 letter, Stitt asked the Department of Public Safety and Oklahoma Corporation Commission to refrain for 120 days from initiating inspections, citations or other enforcement actions based solely on the presence or use of dyed diesel in highway vehicles. He asked the Tax Commission to seek relief from the Internal Revenue Service for qualifying Oklahoma users and to facilitate reporting and payment of applicable state taxes.
Why the red dye matters
Red-dyed diesel is generally sold for uses such as powering tractors and other equipment off public highways. The dye identifies fuel sold without the diesel taxes ordinarily paid for highway use. A farmer can use it in a tractor working a field, but putting it in a truck used on public roads to haul crops or livestock can bring tax liability and penalties.
The IRS says its federal diesel tax is 24.4 cents a gallon and that misuse of dyed fuel can carry a penalty of at least $1,000 or $10 a gallon, whichever is greater. Oklahoma lists its diesel fuel tax at 19 cents a gallon.
Stitt said rising diesel costs are hitting producers as they harvest crops and move agricultural products and livestock. “The state should ease burdens where it can,” he said.
The governor’s release calls the action an order pausing enforcement of all taxes, regulations and fines on red diesel in farm vehicles. The signed letter asks for a narrower change in state enforcement priorities and for arrangements to report and pay applicable state taxes. It does not waive federal penalties; the IRS would have to grant that relief. In past emergencies, the IRS has required payment of the federal highway fuel tax even when it waived dyed-diesel penalties.
