As Trump, IRS 'OK' dyed-diesel for road use, some farmers aren't sure as they await tax certainty

Key Points:

• President Trump's recent Executive Order allows farmers to use cheaper, red-dyed diesel—normally reserved for off-road machinery—on highways, aiming to reduce diesel costs for consumers and assist farmers during harvest.
• Despite federal approval, many farmers and commercial haulers remain cautious about using dyed diesel due to concerns over state-level acceptance, potential future tax liabilities, and inconsistent regulations across state lines.
• Legal experts note that while the Executive Order defers federal diesel taxes, it does not eliminate the obligation to pay them, and full tax forgiveness may require congressional legislation, creating uncertainty for users of dyed diesel.
• South Dakota officials, including Governor Larry Rhoden, have taken steps to ease concerns by instructing highway patrol not to enforce dyed diesel restrictions, but state tax laws remain unchanged, and calls for a state fuel tax holiday have sparked political debate.
• The issue has become politically charged in South Dakota ahead of elections, with farmers' groups and political parties pushing for tax relief measures, while some leaders criticize these moves as politically motivated rather than focused on effective policy.