U.S. Senator Robert Menendez today announced that in order to speed restoration of critical services and commerce, the IRS will not impose a tax penalty when dyed diesel fuel is sold for use or used on New Jersey highways. As a result of super-storm Sandy, the state's regular petroleum distribution network has been damaged, creating a shortage of clear diesel fuel.
"This waiver is important to making dyed fuel available for road use immediately," said Menendez. "It is another clear example of this Administration making good on its commitment to cut red tape and help those on the ground working on recovery. If we all work together we can solve this fuel crisis and restore some normalcy."
According to industry estimate, there could be millions of gallons of dyed diesel in storage.
This penalty relief is available to any person that sells or uses dyed fuel for highway use. Ordinarily, dyed diesel fuel is not taxed because it is sold for uses exempt from excise tax, such as to farmers for farming purposes.