H.R. 10104: Restoring Economic Diesel Fuel Act of 2026

This bill would change federal tax law so that there would no longer be a specific penalty for selling dyed fuel for taxable use or using dyed fuel in a way that is subject to tax.

What dyed fuel is

Dyed fuel is usually diesel or similar fuel that has been marked with dye to show it is intended for untaxed or lower-tax uses, such as certain off-road or special-purpose equipment. Under current law, using that fuel in taxable on-road vehicles or selling it for taxable use can trigger a penalty.

What the bill changes

• It repeals Section 6715 of the Internal Revenue Code, which is the section that imposes penalties for these dyed-fuel violations.
• It makes related technical edits elsewhere in the tax code so the deleted penalty provision is removed from cross-references and section tables.
• It says the change applies to fuel sold or used after December 31, 2025.

Practical effect

If enacted, the federal tax code would no longer include this particular penalty for dyed fuel being sold or used in taxable situations after the effective date. That would mean one enforcement tool currently used against improper dyed-fuel sales or use would be eliminated.

Relevant Companies

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