Dyed Diesel Troubles

Dyed Diesel Troubles. I'm Greg Martin with today's Fruit Grower Report. Farmers know the difference. Dyed diesel or diesel tinted red is for use in farm machinery in the field or off-road. Scott Dilley, WFB's Public Policy Analyst says now the IRS is getting involved. DILLEY: Clear diesel of course costs more money because there are taxes included in it whereas dyed diesel does not have taxes associated with it. Traditionally the activities that happen on a farm perhaps going from the farm to a field, from field to field and from field back to the farm the vehicles that are involved in that have been able to use dyed diesel. At least one if not two IRS agents are in the state right now saying that is not the case. DILLEY: Instead the IRS is saying that people need to pay for and use clear diesel if they use any public roadway with their farm equipment and then come back later at the end of the year or the quarter and claim a certain tax rebate or credit associated with how much driving or how much diesel they used off-road. As you might guess the record keeping for this would be an astronomical nightmare. But Dilley says there is some confusion due to a state law. DILLEY: State law is a little more lenient. State law allows for farm exempt vehicles to use dyed diesel within a 15 mile radius of the farm. That has been the interpretation and up until this year, until the past month or so we have understood that to be pretty much the same as federal law. More tomorrow. That's today's Fruit Grower Report. I'm Greg Martin on the Ag Information Network.