Illinois Department of Revenue
 
 
Motor Fuel
 
 
 
 
 

Requirements

 
 

What are the specific requirements of dyed diesel?

  • The fuel must be dyed prior to the removal at the terminal rack.
  • The dyed diesel must be properly labeled.

What does "properly labeled" mean?

  • Storage tanks, containers, or facilities must be labeled with a legible & conspicuous notice stating "Dyed Diesel Fuel, Non-Taxable Use Only".
  • Bills of lading and invoices accompanying any sale of dyed diesel must contain a legible & conspicuous notice stating "Dyed Diesel Fuel, Non-Taxable Use Only, Penalty For Taxable Use".

Why must I report my dyed diesel transactions?

These transactions must be reported in order to track the tax-free sales and use of the dyed diesel fuel. Additionally, UST and EIF reporting applies to dye diesel.

How do I report my dyed diesel transactions?

You report the transactions by separating out your dyed diesel activities from your other special fuel transactions.

What are the violations for not properly using dyed diesel?

  • Knowingly selling or attempting to sell dyed diesel fuel for highway use:
    • First Offense: $1,000 fine Class A misdemeanor.
    • Second or Subsequent Offense: $5,000 fine Class 4 felony.
  • Knowingly sell, store, or transport dyed diesel fuel without the required notices:
    • First Offense: $500 fine
    • Second or Subsequent Offense: $1,000 fine
  • Having dyed diesel in the fuel tanks attached to a motor vehicle required to be registered for highway purposes:
    • First Offense: $1,000 fine, Class A misdemeanor
    • Second or Subsequent Offense: $5,000 Class 4 felony
  • Knowingly selling or attempting to sell dyed diesel fuel for highway use or for use in a recreational-type watercraft:
    • First Offense: $1,000 fine Class 4 felony.
    • Second or Subsequent Offense: $5,000 fine Class 2 felony.
  • Knowingly possessing dyed diesel for use in recreational-type watercraft:
    • First Offense: $1,000 fine Class A misdemeanor
    • Second or Subsequent Offense: $5,000 Class 2 felony

How are violations discovered?

  • Word-of-mouth or anonymous referrals
  • Account reviews
  • Audits
  • Site inspections
 
 
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