RALEIGH – North Carolina suspended state penalties through Dec. 31 for farmers who use dyed diesel on public roads, a temporary action intended to ease harvest-season fuel costs.
Gov. Josh Stein directed North Carolina Department of Revenue Secretary McKinley Wooten to provide penalty relief from the state’s prohibition on highway use of dyed diesel. The state said many agricultural producers already store the fuel for off-road equipment and can use those supplies during harvest, the most fuel-intensive part of agricultural production.
The state action does not provide federal penalty relief. Stein separately asked the Internal Revenue Service for the maximum available federal relief, but that request remained pending when the state announced its action.
Dyed diesel is chemically almost identical to regular road diesel, but red dye marks fuel that is generally exempt from highway taxes and restricted to off-road uses. Reuters reported that federal levies on highway diesel include a 24.3-cent-per-gallon diesel tax and a 0.1-cent-per-gallon underground-storage-tank fee. Broader use may reduce the tax burden for eligible users, but analysts told Reuters that it would not increase diesel supply or lower underlying wholesale prices.
North Carolina said diesel prices reached $6.25 per gallon in the state during September. The Governor’s Office described agriculture as a $117 billion state industry that employs one in five North Carolinians.
For farmers, the immediate business consequence is access to existing dyed-diesel inventories for road travel without state penalties through year-end. Separate federal requirements still apply unless federal relief is granted.
The state announcement did not estimate total cost savings, participation or the fiscal effect of the temporary enforcement change.
Featured image: Official North Carolina Department of Revenue logo from the agency’s e-services portal. The logo was proportionally sized and otherwise unchanged above the approved NC Business Desk footer.