USDA Reports 31 States Taking Action on Diesel Relief
USDA says 31 states have taken or announced dyed diesel relief measures, with potential combined savings exceeding $640 million.
The U.S. Department of Agriculture (USDA) is encouraging governors to provide state-level relief for the use of dyed diesel fuel on highways after 31 states took or announced related action. The initiative is intended to reduce fuel-related costs for farmers, ranchers, and transportation operators during harvest season.
On October 29, 2026, Agriculture Secretary Brooke L. Rollins commended states that have acted and urged remaining governors to consider similar measures.
President Donald J. Trump signed Executive Order 14435, Emergency Tax Relief on Diesel Fuel, on October 5. The order directed the U.S. Department of the Treasury and Internal Revenue Service (IRS) to provide temporary federal penalty relief for highway use of off-road dyed diesel and suspend enforcement of applicable federal excise taxes.
“I want to personally thank President Trump and Vice President Vance for their leadership in advancing this important relief for American agriculture. I also want to commend the governors who have taken action to provide relief to our hardworking farmers, ranchers, and transportation operators during this critical harvest season,” said Secretary of Agriculture Brooke L. Rollins. “Their leadership is an important part of ensuring this relief reaches the producers who need it most. For the remaining states, I respectfully encourage their governors to join us in taking corresponding action on dyed diesel alongside the Trump Administration. Together, we have an opportunity to provide our mutual constituents with real relief for the remainder of this harvest season and beyond.”
Potential Savings for Agriculture
The federal diesel excise tax totals 24.4 cents per gallon. USDA estimates the combined federal and state initiative could provide more than $640 million in savings across approximately 224.6 million harvested acres.
The 31 states that have taken or announced action have used measures such as suspending certain penalties, modifying enforcement practices, or taking other steps intended to reduce burdens on agricultural producers and transportation operators.
State-level measures vary, and USDA is encouraging governors who have not acted to consider corresponding relief.
What the Federal Relief Covers
The IRS issued two guidance documents outlining the temporary relief:
October 14, 2026: Guidance IR-2026-122 explained that the IRS would suspend enforcement and collection of the federal dyed diesel excise tax and waive penalties for on-road use of dyed diesel during the relief period.
October 21, 2026: Guidance IR-2026-125 provided additional relief from federal tax-related reporting and recordkeeping requirements for covered dyed diesel transactions during the relief period.
The federal measures apply during the designated relief period. Farmers and other affected stakeholders should review the IRS guidance to understand the applicable requirements.
Where to Find More Information
USDA said it will continue working with state leaders on implementation and helping farmers, ranchers, and transportation operators access relief available under federal and state law.
Questions about dyed diesel relief, eligibility, or implementation can be directed to USDA at DyedDiesel@usda.gov. Additional information is available through the IRS's Dyed Diesel Frequently Asked Questions.
