Sponsor
W. Greg Steube
Representative · R-FL
Representative · R-FL
The bill removes a narrow statutory penalty for dyed fuel, easing compliance and reducing legal risk for businesses while raising the risk of increased dyed-fuel misuse, lost tax revenue, and enforcement complications for the IRS.
Small businesses, fuel sellers, transportation workers, and other dyed-fuel users will no longer face the IRC §6715 penalties for dyed fuel violations starting Jan 1, 2026, reducing legal risk, compliance costs, and potential enforcement exposure.
Taxpayers and the federal government may face increased tax revenue loss if removing the penalty weakens deterrence against untaxed or abusive use of dyed fuel.
The IRS loses a specific statutory penalty authority, which could complicate enforcement of dyed-fuel rules and force the agency to rely on alternative administrative measures or litigation, increasing regulatory uncertainty for taxpayers and businesses.
Based on analysis of 2 sections of legislative text.
Removes the federal penalty for dyed fuel by deleting Internal Revenue Code section 6715 and updating cross-references and table entries.
Official title: To amend the Internal Revenue Code of 1986 to eliminate the penalties for sale for use and use of dyed fuel in taxable use.
Introduced August 13, 2026 by W. Greg Steube · Last progress August 13, 2026
Removes a federal tax penalty that previously applied to dyed fuel by deleting Internal Revenue Code section 6715 and updating related cross-references. The change makes the penalty inapplicable to fuel sold or used after December 31, 2025 (effective January 1, 2026). The bill is narrowly focused: it only eliminates the penalty provision and adjusts the U.S. tax code table entries and cross-references so the penalty no longer applies to fuel transactions. It does not create new taxes, appropriate funds, or add new regulatory requirements.