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INTRODUCTION

Diesel fuel tax evasion is alleged to be a problem largely because heating oils and diesel fuels are similar refinery products which, in many cases, may be used interchangeably. The use of untaxed heating oils in the operation of diesel equipment on the highways is of concern to motor fuel tax authorities because of the resulting loss in tax revenues. Legitimate business is equally concerned for the same reason, but also because evasion of taxes results in unfair competitive advantage for the tax evader.

One suggested method of discouraging diesel fuel tax evasion is the use of a color marker to dye heating oils used for non-highway purposes. Dyeing would distinguish these products from those used in diesel equipment on the highways. Presence of dye in highway equipment would be considered prima facie evidence that the diesel fuel tax was being evaded. Dyeing does not prevent tax evasion. It makes tax evasion easier to detect, but by itself, it is only a minor deterrent.