Trump Signs Executive Order Offering Temporary Diesel Tax Relief for Farmers and Truckers
October 6, 2026
President Donald Trump has signed an executive order aimed at lowering diesel costs for farmers, truckers and other workers by temporarily expanding highway access to dyed diesel and directing the Treasury Department to consider deferring certain federal fuel tax obligations through the end of 2026.
The order, signed Oct. 5, comes as elevated diesel prices and tight global supplies continue to put pressure on agriculture and transportation. The White House says the action is intended to provide temporary relief through Dec. 31.
Under the order, the Treasury secretary has five days to determine whether relief is authorized under federal law and which taxpayers would qualify. If those requirements are met, Treasury is directed to defer certain federal excise tax liabilities incurred from Oct. 5 through Dec. 31 without penalties or interest.
One of the most significant provisions for agriculture and trucking involves red-dyed diesel, which traditionally is sold tax-free for eligible off-road uses such as farm equipment.
The order directs the Treasury Department to have the IRS announce that it will not impose specified federal penalties when dyed diesel is sold for highway use or used on highways during the relief period. The White House describes the move as temporarily allowing off-road dyed diesel to be used on highways while deferring the applicable federal excise tax.
The federal diesel excise tax is 24.4 cents per gallon, according to the White House, which estimates that amounts to roughly $60 on a 250-gallon fill. Savings could be greater in states that take corresponding action on state fuel taxes.
USDA Directed to Help Farmers Access Dyed Diesel
The executive order also gives USDA a role in implementing the temporary policy.
The agriculture secretary is directed to coordinate with agricultural cooperatives, rural fuel distributors, farm supply organizations and other agricultural stakeholders to help ensure adequate supplies of dyed diesel reach high-demand areas.
USDA is also directed to encourage states to take corresponding actions that support the policy.
The Department of Transportation, meanwhile, is directed to work with states, industry representatives and labor organizations on implementation while continuing existing safety and compliance enforcement measures.
Deferred Taxes Could Eventually Be Forgiven
The executive order does not automatically eliminate the federal taxes that could be deferred.
Instead, Trump directed Treasury to explore ways—including potential legislation—to eliminate the obligation to eventually pay those deferred amounts. Treasury must also issue guidance detailing who qualifies, what relief is available and when any postponed taxes would ultimately be due.
The distinction means the immediate action centers on tax deferral and penalty relief, while permanent forgiveness would require additional legal authority or congressional action.
The White House says the temporary policy is designed to reduce fuel costs for industries heavily dependent on diesel as global supply constraints continue to affect prices.
The relief period outlined in the executive order runs through December 31, 2026.
Read the full executive order from the White House
Source: White House
