La. extends ag fuel relief; IRS clarifies dyed diesel relief
Louisiana Gov. Jeff Landry has extended relief for forestry and agriculture diesel fuel supply and the IRS has recently released guidance that clarifies the executive order on diesel fuel relief that addresses reporting and record-keeping.
In Louisiana, the original order granting relief was extended through Nov. 18. It suspends penalties for eligible vehicles to use tax-exempt red-dyed diesel intended for off-road use on public highways. This includes all registered Class 2 vehicles for forest products. However, the state excise tax on the fuel must still be paid.
According to Landry's executive order, "All departments, commissions, boards, agencies and officers of teh State, or any political subdivision thereof, ar authorized and directed to cooperate in actions the State may take in resopnse to this event."
The order is good through Nov. 18, "unless amended, modified, terminated or rescinded earlier by the Governor or terminated by operation of law."
The executive order from President Donald Trump announced in October provides temporary federal penalty relief for dyed diesel sold for highway use or used in highway vehicles from Oct. 1 through Dec. 31. The latest guidance from the IRS for covered dyed diesel tax liabilities arising durin that period says the federal agency will not challenge failures to File Form 720 soley to report those liabilities, report those liabilities on an otherwise required Form 720; and create or maintain records soley to substantiate those liabilities.
The IRS won't impose civil penalties or additions to tax for the covered failures. The protection also applies when filing deadlines fall after Dec. 31. "Businesses will not have to submit catch-up filings or reconstruct records afterward for these covered requirements."
Businesses required to file Form 720 for other tax liabilities must continue to do so. Separate requirements for other taxes, exemptions, credits or refunds also remain in place.
As for concerns about red dye remaining in fuel tanks after the relief period end, the IRS is considering a grace period or other measures, but it has not yet announced any protection for that.
This IRS guidance does not announce forgiveness of the underlying federal fuel tax, adding that further guidance would address payment postponement and possible elimination of deferred amounts.
Still, state requirements apply, as federal relief does not override state fuel taxes or penalties.
