Diesel 1 and Diesel 2

[Wake Havasu]

This is the html version of the file http://www.arb.ca.gov/enf/advs/advs124.pdf.
Page 1
August 1995
Number 124
RED DYED DIFSEL ENFORCEMENT
The purpose of this advisory is to enlist the support of air pollution control districts in California in the national effort
to prevent and detect the use of nontaxed diesel fuel for taxable use in California. The Air Resources Board (ARB) is
working with the Internal Revenue Service (IRS) and the State Board of Equalization to stop this illegal activity.
Motor fuel tax evasion results in an estimated annual loss in excess of Sl billion of Federal revenue. The magnitude of
diesel fuel tax evasion fostered support for a national motor fuel coloring or marking program to differentiate taxable highway
diesel fuel from non-taxable No.2 distillate fuels used for other purposes. 'i.e. heating oil, boiler fuel, marine fuel, etc.
Based on the experiences with diesel marking programs in other countries, such a program was determined to be feasible
and would likely provide substantial benefits in the enforcement of diesel fuel taxes.
To improve fuel excise tax compliance, the Omnibus Reconciliation Act of 1993 changed the point of taxation for diesel
fuel to the block loading rack level and required the dying/marking (RED DYE) of all diesel fuel destined for non-taxable
1Jse. California bas enacted analogous legislation which becattle effective on July 1, 1995.
Both pieces of legislation have a dyed fuel testing component. These components require inspections at any place where
taxable diesel fuel is produced or stored. or at any inspection site where tax evasion may be discovered. Inspection sites
may include highway inspection stations, agricultural inspection stations. or any other location designated by the IRS.
The ARB is working with the IRS to enforce the red dyed diesel fuel regulations. The ARB is being conuacted by the
IRS to conduct inspections of the fuel in the fuel tanks of diesel trucks used on the highways. The inspections will fake
place at inspection sites mentioned above. If a truck is found to have red diesel in its tanks(s), the driver will be assessed
a penalty.
The ARB is requesting that any local air pollution conb'Ol district in California baving information regarding the use of
RED DYED DIESEL in highway vehicles notify the ARB Hotline at (800) 952-5588.
If you have any questions regarding this advisory, please contact Mr. Dickman Lum of the Field Enforcement Section at
(916) 327-1520.
Written inquiries may be sent to:
James J. Morgester, Chief
CompUance Division
P.O. Box 2815
Sacramento, CA 95812

[058]

Jordy is right, #1 is for cold weather[ usually found in the midwest and east coast] and #2 is a little less refined and doesn't respond well to cold weather and will jell below about 0* F. Has nothing to do with red-dye, clear diesel or taxes.

[Dave C]

As a side note, the use tax paid on diesel is for "on-road" use (i.e. semi's, pickups used on the highway). The use tax is collected at the pump.
If you use diesel off-road for equipment, farm equipment and such not used on a highway and if you can't find red dye (i.e. non-use tax) then you can claim a credit on your income tax return for overpayment of the tax.
just a quirky bit of the IRC.
but then what the hell do I know........

[Freak]

#1 Diesel is the stuff you buy at the pumps. Already has road tax on it. You can run it in any diesel vehicle, tractor, boat, car, big rig.
#2 Diesel is dyed red for off road use only. Farm equipment etc. But you can buy and run this in your vehicle if you keep a mileage log and submit taxes based on your gallons used and mileage. Big headache.
FYI I buy #2 and get it for around $1.10-1.30 a gallon in 10k gallon quantities.
What ya got that holds 10k gallons?

[Hotfish]

About six months ago in Scottdale DOT was checking anything that ran on diesel for red fuel. Kind of a waste of time in that part of town.