?Diesel Fuel and Taxation
Diesel fuel taxes are higher then other types of fuel in the Untied States. There is untaxed diesel fuel which is also known as “off road” which can be used in the United States. It is often used for tractors, RV’s or utility vehicles. The vehicles which qualify to use “off road diesel” must not use these vehicles on public roads and they must be used primarily for agricultural purposes.
Untaxed diesel fuel is allowed to go over the limits for sulphur which were established in 2007. “Off road diesel” is the color red because it has been dyed. If this fuel is found in the possession of a person that does not have rights to it, they can be levied heavy fines, up to $10,000.
“Off road diesel” fuel is also known as red diesel in parts of the world such as Belgium, the United Kingdom and the Netherlands. It is used to heat homes, refrigerated trucks and in vehicles used for farming and in boats. In Ireland, this same type of fuel is dyed green.
While the prices of diesel gas in the United States is more expensive then traditional gasoline, this is not the case everywhere. In India, the price for diesel fuel is cheaper then gasoline. It is used in most of the company’s transportation vehicles and thus are priced more cheaply. The same is true for the country of Germany. Their diesel fuel taxes are cheaper then those placed on gasoline.
As individuals are looking for alternative diesel fuel sources, biodiesel is being discussed more and more. Biodiesel taxes in the United States differ greatly depending on the state. In the state of Texas, biodiesel is not taxed at all and the taxes are lower on biodiesel fuels that use blends. Other states do indeed tax biodiesel.
A big factor in the price of diesel fuel is taxation. Fuel, both diesel and gasoline is taxed by numerous sources. This includes the state and federal excise taxes. Some state’s taxes are a lot higher then others. For example, the average state excise tax for biodiesel fuel is around $.22 cents. In Washington state, this figure is $.34. This has a big effect at the pump.
Not all diesel fuel is taxed. Off road diesel is not taxed. Off road diesel fuel is used for farming equipment, recreational vehicles and other vehicles which are not used on public roads. This fuel is typically made red with dye. If an individual is found with off road diesel in their possession unlawfully, they can be heavily fined. In some states in the U.S. biodiesel is not taxed at all. In other states it is.
Red diesel is not just used in the United States but in other countries around the world. In the United Kingdom they use it to heat homes, as fuel in refrigerated trucks and in farming equipment and boats. In India, this type of fuel is used a great deal in their transportation vehicles and is cheaper as not to financially overburden companies or the government.
?Diesel Fuel and Taxation