Bill description: This bill eliminates the tax exemption for dyed diesel fuel.

Rating: +2

Analyst’s note: Idaho offers tax exemptions on diesel fuel in two ways. Individuals may file for a refund on regular diesel fuel, or they may purchase dyed fuel sold by the manufacturer at a price that does not include federal or state tax. Senate Bill 1044 was introduced earlier this session establishing fuel inspections to penalize those who used dyed fuels illegally. The Idaho Freedom Foundation rated this bill (-2) for increasing the scope of government programs and for increasing penalties.

Does it create, expand, or enlarge any agency, board, program, function, or activity of government? Conversely, does it eliminate or curtail the size or scope of government? 


This bill eliminates a superfluous program reducing the scope of government by. The tax refund and dyed fuel programs serve largely the same purpose but government funds are spent managing two programs.This bill eliminates the need for enforcement proposed in Senate Bill 1044. (+1)

Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market? 


Dyed and undyed fuel has created inefficiencies in how the diesel fuel industry manages its supplies. Companies must maintain separate storage tanks, doubling the facility needs to provide identical goods. Dyeing fuel creates no additional value while costing the manufacturer to dye it. (+1)