Star Oilco

Fuel taxes vary by state and sometimes even local municipality. With off-road diesel, usually the only taxes to consider are sales taxes on the fuel. In Oregon there are no taxes on dyed off-road fuel. In Washington state there are sales taxes for dyed-diesel charged on top of the sale price of the fuel. (NOTE: If you use clear diesel in Washington state there is no sales tax as the road tax is being charged.)  If you are curious for a more in depth answer Star Oilco has a full explanation of Oregon Diesel Taxes (a unique system in the United States for local fuel tax collection of trucks over 26,000 GVW).

Yes. If you are consuming dyed diesel and are not paying for the on-road fuel taxes in Washington state, the sales tax is charged. If you use clear fuel with road taxes attached to the fuel, the sales tax is not charged. For more on Washington fuel taxes see the Washington Department of Revenue. 

Your petroleum distributor has some small taxes (under $.01) attached to the fuel they buy at the wholesale terminal level. Those taxes being the U.S. EPA Superfund cleanup and the “LUST” or Leaking Underground Storage Tank cleanup fund. Beyond that, there are no taxes (Federal, state or local municipality) on fuel used for off-road diesel in Oregon state.

In Oregon you can buy clear fuel exempt of Oregon’s state road taxes. The qualifications for using clear diesel Oregon State tax exempt are the following: 

vehicles issued a valid ODOT Motor Carrier permit or pass (weight receipt) 

vehicles issued a valid Use Fuel User emblem by the ODOT Fuels Tax Group 

vehicles registered to a US government agency, Oregon state agency, Oregon county or city, and displays a valid Oregon “E” plate 

vehicles, or farm tractors/equipment only incidentally operated on the highway as defined in ORS 319.520 

vehicles or equipment that are unlicensed and/or used exclusively on privately owned property 

Typically when checking for illegal use of dyed fuel, regulators will sample from the tank or spin the fuel filter and observe for obvious dyed fuel. If the fuel is clear (or even slightly pink) and they suspect dyed fuel was used in the vehicle, they can apply a special black light that will glow an obvious color denoting dyed fuel had been in contact with the vehicle. They will shine that light on the filter, fuel tanks, and various parts in the engine compartment that would have come into contact with the fuel. If those areas denote even a mild trace of the red-dye used in off-road diesel, they will cite the vehicle operator. There are kits sold online for filtering dye out of fuel to remove the color.  Those kits will not remove enough dye to avoid detection by these lights.

Off road diesel is dyed red to show that the on-road fuel taxes are not paid or that it is a tax-free fuel.  The Federal Government and State Government’s have fuel taxes for on-road fuel usage to help pay for the roads we all drive on.  If you are using diesel for a non-road equipment, machinery, or heating/boiler applications the fuel taxes are exempt and the fuel is dyed to ensure it’s tax free status is immediately seen.  Regulators in a road side or site level inspection can also shine a black light on specific places in a vehicles system to denote if dyed fuel is being used in violation of the law as well.

In the Pacific Northwest at the current moment? Usually nothing. Heating oil is dyed diesel. Most petroleum distributors are selling the mainstream dyed diesel specification for use as heating oil in order to lower the overall cost of the fuel. There are different ASTM specifications for heating oil and dyed diesel dependent on the state you buy it in. Heating oil’s specification has wider tolerances than diesel specifications as furnaces and boilers can handle dirtier, lower quality fuels than off-road equipment with a particulate trap. Heating oil is always a diesel fuel, but sometimes dyed diesel for off-road equipment has a different specification than heating oil. For example, in Oregon a 5% biodiesel or 5% renewable diesel mandate exists for any dyed diesel fuel used in off-road equipment. This biofuel mandate exempts heating oil and boilers. So heating oil can be biodiesel free but off-road diesel for equipment cannot.

If you are storing off-road or dyed diesel for longer than six months you will want to make sure it is stabalized. Star Oilco recommends Valvtect Plus Six as the fuel additive you want to use.  Our recommended fuel additive is a fuel microbiocide with stability additives made for diesel long term storage.  This kills and prevents the growth of biological “hum-bugs” in your tank.  Bacteria, yeast, and algae can grow in your fuel tank. Usually in a small amount of water that collects in the bottom of the fuel storage tank (be it the bulk tank you  fuel out of or the saddle tank on your equipment).

There are several ways to do this.  What you will want to do varies based on how much water and what it is in.  If you are dealing with a large bulk fuel tank you want to definitely pump the tank bottom to get the water out.  If you are seeing extreme biological activity (Hum-Bug growing in your tank) you want to do a kill dose treatment on that tank. It might not be a bad idea to also spend a few thousand dollars to have a professional tank cleaning company come in and manually clean the tank prior to adding the kill dose to kill anything growing in your tank.  If it’s the tank on your equipment usually the best route is to drain the tank, flush the tank, and also put a kill dose of  a fuel microbiocide to make sure nothing continues to grow.  If you want to talk to someone feel free to call Star Oilco, you do not need to be our customer for us to walk through some solutions you can do yourself. 

There are a very few rural gas stations that provide this fuel.  Some Pacific Pride or CFN cardlock locations also have pump available for this fuel.  The easiest way to acquire this fuel is through a fuel company.  Star Oilco is one such company that can deliver dyed diesel for it’s customers, or provide cardlock cards for its customers.