Submitted by the Arizona Department of Transportation
What you need to know about Red-Dyed Diesel Fuel use in Arizona
Select industries in Arizona are allowed to use a special diesel fuel in vehicles and equipment according to federal and state law requirements. This fuel, called “red-dyed diesel” because it has a special red dye added to visually identify it from standard diesel, is exempt from motor fuel taxes.
Red-Dyed Diesel Fuel Has a Specific Legal Use
Per Arizona law, red-dyed diesel fuel may be legally used only in vehicles and equipment that is not driven on public streets or highways. Red-dyed diesel fuel is not taxed because the vehicles that legally use it are not putting wear and tear on public roadways.
Money collected from motor fuel taxes is critical to Arizona’s economy. Those funds are used to build and maintain the state’s safe and reliable transportation system.
That’s why the Arizona Department of Transportation is engaged in a public outreach program to educate Arizona’s transportation system users about how to comply with the regulations regarding the proper use of red-dyed diesel fuel.
There is a Problem
ADOT is driving this customer service effort because there is a problem statewide concerning the use of diesel fuel. Red-dyed diesel fuel is being illegally used in vehicles and equipment which should be using standard diesel fuel while traveling on public streets and highways. Violations of the red-dyed diesel regulations result in Arizona losing millions of dollars in revenue that is needed to pay for roadway maintenance and improvements.
Law Enforcement and Penalties
ADOT’s Enforcement and Compliance Division, along with other state and federal agencies, is responsible for the enforcement of federal and state laws governing the use of dyed diesel fuels. ADOT officers can inspect vehicles and business operations to ensure compliance with federal and state regulations governing diesel fuel.
There are significant penalties for the illegal use of red-dyed diesel fuel. Per state law, the first offense has a minimum penalty of $1,000 or $10 per gallon of red-dyed diesel fuel involved, whichever is more. For multiple offenses, the first offense penalties are multiplied by the number of occurrences. There can be criminal charges and civil penalties as well.
What Can You Do?
Everyone should play by the same rules and pay their fair share. Public awareness, education and involvement are essential in eliminating fuel tax evasion. Either of the following methods can be used to report suspected violations of Arizona’s fuel tax laws: