programs Criminal Investigation Division

Motor Fuels Tax Cases

The Comptroller’s office oversees the collection of the state’s taxes on gasoline, diesel fuel and liquefied and compressed natural gas. The agency also regulates motor fuel suppliers and certain users, including dealers and interstate truckers. (Tax Code, Chapter 162)

Crimes and Punishment

The Tax Code (Section 162.403) sets forth 36 criminal offenses involving motor fuels taxes (MFTs), several of which are felonies punishable by fines and/or imprisonment. Felony crimes include:

• selling or delivering dyed diesel (non-taxable) fuel for motor vehicle operation on a public highway (see below);
• blending fuel to expand its volume and evade taxation;
• failing to remit collected motor fuel tax funds;
• destroying required books and records;
• falsifying entries in required books and records;
• engaging in a motor fuel transaction without a license; and
• transporting motor fuel without shipping documents.

Dyed diesel fuel is untaxed because it is intended for use in off-road vehicles that do not operate on public highways (e.g., farm tractors). This exemption makes dyed (red) diesel highly susceptible to abuse and corruption.

Other Consequences

The Comptroller's office may cancel or refuse to issue, or reissue, a Chapter 162 license to any applicant who has violated or failed to comply with state motor fuels tax laws or a rule issued by the Comptroller (Tax Code, Sec. 162.005). In some cases, this can occur without prior notice (Tax Code, Sec. 162.006).

Venue

Motor fuels felony and misdemeanor cases are prosecuted in the counties in which they occur.