SC Department of Revenue
DOR Waives Dyed Diesel Fuel Penalty; Announces Hurricane Katrina Relief



Contact: Stephanie Jones

Phone: (803) 898-5287


For Immediate Release: September 2, 2005




COLUMBIA, S.C.  The South Carolina Department of Revenue, in conjunction with the Internal Revenue Service (IRS), announced today that it will not impose penalties when dyed fuel is sold for use or used on the highway. 


In South Carolina, federal penalty relief began on August 31, 2005 and will remain in effect through September 15, 2005. This penalty relief is available to any person that sells or uses dyed diesel fuel for highway use, but is only available if the federal motor fuel tax of 24.4 cents per gallon has been paid by either the person selling the dyed diesel fuel or by the operator of the vehicle that is using the dyed diesel fuel. 


South Carolina will grant similar penalty relief to any person that sells or uses dyed diesel fuel for highway use, but this penalty relief is only available if the state motor fuel tax of 16 cents per gallon has been paid by either the person selling the dyed diesel fuel or by the operator of the vehicle that is using the dyed diesel fuel.


The injection of red dye into diesel fuel indicates that no motor fuel tax has been paid. Dyed diesel fuel is ordinarily not taxed since it is used for non-taxable off-road uses (e.g., farming) or other exempt uses. Therefore, its use in a highway vehicle is normally subject to a penalty (in addition to the motor fuel taxes).


Retailers, suppliers and other sellers of dyed fuel are expected to collect and pay the motor fuel tax on the sale of dyed fuel. If tax is not collected, the consumer is expected to pay motor fuel tax on the fuel.


The Department of Revenue also announced that it will grant special tax relief for taxpayers in the Presidential disaster area that has been affected by Hurricane Katrina.  The special tax relief period will coincide with the IRS relief period, which generally allows taxpayers until October 31, 2005 to file tax returns and submit tax payments. 


During that time, the Department of Revenue will grant relief to individuals and businesses located in the disaster area, taxpayers who have businesses in South Carolina with offices in the disaster area whose operations have been affected by the storms, those whose tax records are located in the disaster area, those whose returns are prepared by tax professionals in the affected areas, and relief workers.


If the IRS grants relief to other areas affected by the hurricane or grants an additional relief period, then the Department of Revenue will grant the same relief and period.


On September 2, 2005, the IRS expanded its relief to cover an additional 33 parishes, 37 counties in Mississippi, three counties in Alabama and three counties in Florida. The disaster areas designated for individual relief include (new and previously announced locations): 

  • 64 Louisiana parishes: Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Bienville, Bossier, Caddo, Caldwell, Calcasieu, Cameron, Catahoula, Claiborne, Concordia, Desoto, East Baton Rouge, East Carroll, East Feliciana, Evangeline, Franklin, Grant, Iberia, Iberville, Jackson, Jefferson, Jefferson Davis, Lafayette, Lafourche, LaSalle, Lincoln, Livingston, Madison, Morehouse, Natchitoches, Orleans, Ouachita, Pointe Coupee, Plaquemines, Rapides, Red River, Richland, Sabine, St. Bernard, St. Charles, St. Helena, St. James, St. John, St. Landry, St. Mary, St. Martin, St. Tammany, Tangipahoa, Tensas, Terrebonne, Union, Vermilion, Vernon, Washington, Webster, West Baton Rouge, West Carroll, West Feliciana and Winn;  
  • 52 Mississippi counties: Adams, Amite, Attala, Chickasaw, Choctaw, Claiborne, Clarke, Clay, Copiah, Covington, Forrest, Franklin, George, Greene, Hancock, Harrison, Hinds, Itawamba, Jackson, Jasper, Jefferson, Jefferson Davis, Jones, Kemper, Lamar, Lauderdale, Lawrence, Leake, Lee, Lincoln, Lowndes, Madison, Marion, Monroe, Neshoba, Newton, Noxubee, Oktibbeha, Pearl River, Perry, Pike, Rankin, Scott, Simpson, Smith, Stone, Walthall, Warren, Wayne, Webster, Wilkinson, and Winston;

  • Six Alabama counties: Baldwin, Clarke, Choctaw, Mobile, Sumter and Washington; and

  • Three Florida counties: Broward, Miami-Dade and Monroe.

To qualify for this special tax relief, affected taxpayers should write "Hurricane Katrina" at the top of the return relying on this relief. Individuals or businesses located in the disaster area, or taxpayers outside the area that were directly affected by the disaster, should notify the Department of Revenue if they receive penalties for filing returns or paying taxes late for waiver of these penalties. Taxpayers with special tax relief questions should contact the Department of Revenue at (803) 898-5709.



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