Sponsors (2)
The bill returns previously paid dyed diesel/kerosene taxes to eligible payers but reduces the financial benefit by excluding interest and increases enforcement and penalty risk for claimants.
Taxpayers (entities that paid the section 4081 tax on dyed diesel or kerosene) can recover those taxes: the Treasury must pay an amount equal to the tax for qualifying removals after the bill's effective date.
Taxpayers receiving refunds get no interest, so they are not compensated for the time value of money between when they paid the tax and when they receive the refund.
Claimants face expanded refund/credit categories tied to excessive-claim penalties, increasing IRS enforcement risk and the possibility of civil penalties for those who file claims.
Based on analysis of 2 sections of legislative text.
Requires Treasury to pay (without interest) the section 4081 tax amount to persons who remove eligible indelibly dyed diesel fuel or kerosene from terminals and updates related refund and penalty cross‑references.
Introduced March 25, 2025 by Ron Johnson · Last progress March 25, 2025
Creates a new Internal Revenue Code provision requiring the Treasury to pay, without interest, an amount equal to the section 4081 excise tax to persons who remove "eligible indelibly dyed diesel fuel or kerosene" from a terminal. "Eligible" fuel is diesel or kerosene for which the section 4081 tax was previously paid (not credited or refunded) and which is exempt under section 4082(a). The bill also updates cross-references in existing tax-refund, claim-collection, and civil-penalty rules to include the new provision. The rule applies to fuel removed on or after 180 days after enactment.