A state legislator wants to get rid of non-taxed dyed diesel fuel and possibly add millions of dollars each year to the budget of the strapped Idaho Transportation Department.
Sen. Chuck Winder, R-Boise, assistant majority leader, said he’s heard the state transportation department is getting shorted $5 -$15 million each year by people who use dyed diesel in vehicles that travel Idaho’s highways.
“It’s violating public trust. There’s fairness and equity issues here,” said Winder, explaining that it’s difficult to ask motorists to pay more for roads when some people are cheating the system.
Dyed diesel largely benefits farmers, ranchers, loggers, and miners — the red-colored fuel isn’t taxed 25 cents per gallon, as regular diesel is. It’s supposed to be used in non-licensed, off-road vehicles, like tractors but some put it in vehicles that travel highways. Dan John, tax policy manager for the Idaho Tax Commission, estimates the state is losing $7 million per year, about 10 percent of total diesel tax collected in the state each year; the figure is based on numbers from nearby states.
Maybe $7 million dollars doesn’t go far for road work, but earlier this year the transportation department announced with fanfare a reorganization of staff that would cut $1.5 million over the next two years.
Winder said the state should consider getting rid of dyed diesel and go back to a system where people who use diesel in non-highway vehicles apply to the state for a refund of the tax they paid on fuel they used in non-highway vehicles and equipment.
Other states take steps to curb illegal use of dyed fuel. Montana and Washington test for dyed fuel during safety inspections, John said. Utah, Nevada and Oregon also have testing programs. In Idaho, dyed diesel use operates on the honor system.
“It’s just never been done here,” John said of testing tanks. But if it did happen here, “It needs to be enforced by someone other than the taxing authorities,” he said. “It’s difficult to enforce. You really need to have a law enforcement ability to be able to make stops and dip tanks.”
In some states, state police can enforce dyed diesel laws; Winder said he doesn’t want to see that happen here.
“We don’t want to put law enforcement officers in situations where they’re confronting the public,” he said.
People who are caught using dyed diesel in highway vehicles in Idaho are usually turned in by a neighbor or someone else known to the offender, John said. To curb illegal use of dyed diesel, Winder sponsored the legislation establishing the state’s fines: $250 for the first offense, $500 for the second, and $1,000 for each offense thereafter. For comparison, Nevada’s fines are $2,500 for the first offense, $5,000 for the second within four years, and up to $10,000 for a subsequent offense.
Winder says he plans to talk to colleagues “and see if we can build some consensus on doing away with dyed diesel.”