Trump Signs Tax-Free Red Diesel Order

President Trump signed an executive order on October 5, 2026, letting truckers, farmers, and other qualifying highway users fill up with dyed diesel without the 24.4 cent federal tax through 2026.

“For many years, farm vehicles, construction equipment and other off-road vehicles have used what's known as red-dyed diesel”

Tax Deferral Period

The order defers the federal highway tax on qualifying dyed diesel used in highway vehicles between October 5 and December 31, 2026, with possible state tax breaks.

Diesel Price Impact

Federal energy data shows national on-highway averages up one-third from January levels as Iran- and Ukraine-related supply disruptions pushed retail costs higher.

Eligibility Rules

Eligibility and documentation rules for tax-deferred dyed diesel will be set by the Treasury and IRS rather than as a blanket right for every driver.

North Dakota Gov. Armstrong

North Dakota Gov. Kelly Armstrong said record-high diesel prices are squeezing ag producers and this is a meaningful step to provide temporary relief during harvest season.

“Record-high diesel prices are squeezing our ag producers, and this is a meaningful and timely step we can take to provide temporary relief and help our farmers and ranchers through the harvest season”

Farm Bureau Support

American Farm Bureau President Zippy Duvall stated a federal tax waiver would provide immediate cost relief for farmers, ranchers, and agricultural haulers.

“a federal tax waiver would provide immediate cost relief for farmers, ranchers, and agricultural haulers that continue to rely on taxable clear diesel”

Savings Potential

Waiving just the federal 24.4 cent tax can save an owner-operator $50 to $60 on a large highway fill-up compared to early 2026 prices.