Fuel Tax Evasion

What is fuel tax evasion?

Under the California Revenue and Taxation Code, any person who intentionally evades the reporting, assessment or payment of fuel taxes that would otherwise be due is guilty of fuel tax evasion. Violators are subject to fines and/or jail time.

See the Special Taxes and Fees webpage for current fuel tax rates.

Examples of fuel tax evasion:

  • Using dyed (untaxed) diesel fuel in a vehicle operated on California highways without being licensed to remit the tax.
  • Intentionally importing fuel from outside the state without remitting the appropriate California State fuel taxes.
  • Blending taxable fuel with an untaxed product to increase volume without paying tax on the increase.

Why is fuel tax evasion harmful?

  • When fuel taxes are not paid, those dollars are not available for a variety of transportation uses. Fuel taxes are primarily used for the construction and maintenance of our roads and highways.
  • Fuel tax evasion is bad for the environment. Illegally blended fuels can cause increased soil and air pollution. These result from poor combustion and contamination from toxic or waste chemicals used as blending agents. In addition, illegally blended fuels often cause increased engine wear and can lead to vehicle breakdowns.
  • Fuel tax evasion hurts honest businesses. Fuel can be sold at a lower price when the tax is not paid, which allows the seller to gain more customers and illegally earn increased profits.

Report Fuel Tax Evasion

Public awareness and involvement are essential in eliminating fuel tax evasion. To report suspected fuel tax evasion, contact the Board of Equalization Investigations Division at 1-916-324-0105 or the Tax Evasion Hotline at 1-888-334-3300. You can also submit a complaint online. By law, all complaints are kept confidential unless a court orders otherwise.