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Motor Fuel

General Overview

With the signing of Public Act 91-173, the Dyed Diesel program in Illinois became effective January 1, 2000. Aligning Illinois' program with the Federal dyed diesel/low sulfur program, Illinois law now requires that all special fuel used for non-taxable, non-highway use must have red dye added. The dye provides the identifier which serves as an enforcement tool during field audits and inspections.

The importance of this program is recognized and supported by the motor fuel industry as it serves to "level the playing field" and enhance compliance in an industry vulnerable to tax-evading schemes. Funding secured from the Illinois Department of Transportation, the Illinois State Police, and the Illinois Commerce Commission to purchase vehicles and testing, sampling, and safety equipment, has allowed IDOR to enforce this program.

Additionally, this program has eliminated the need for the department to license, process, and maintain accounts on approximately 8,000 Bulk Users of special fuel. As a result, taxpayer burden has been reduced as they are no longer required to file bulk user returns. These taxpayers have also benefited by not having to maintain support documentation and file claims for refund on the dyed fuel they used off-highway.

What is dyed diesel?

Dyed diesel is any special fuel that has dye added per Section 4d of the Motor Fuel Tax Law. Basically, it's any diesel fuel with any amount of dye present.