President Trump’s recent executive order provides temporary federal tax deferral and penalty relief for on-road use of red-dyed diesel. Federal relief does not automatically change state restrictions or eliminate state tax obligations. Dairy farmers should understand the requirements in each state where they operate.
Wisconsin: Existing restrictions remain in place. Dyed diesel is allowed for qualifying off-road agricultural uses, with a limited exception for certain trucks used principally for agricultural purposes when specific requirements are met. Not all farm vehicles or agricultural uses qualify. A recent Legislative Council memo concludes that the governor cannot unilaterally suspend existing penalties. Non-exempt use can result in state fuel tax liability and penalties of $1,000 or twice the unpaid tax, whichever is greater.
Minnesota: Published state guidance continues to prohibit dyed diesel in licensed trucks and other vehicles operating on public roads, with limited exceptions for certain government vehicles and buses. Farmers should not assume that farm ownership or an agricultural purpose makes a licensed truck eligible. Unlawful use can result in tax liability and a penalty of $1,000 or $10 per gallon, whichever is greater, with increased penalties for repeat violations.
South Dakota: The governor has directed the Highway Patrol not to stop and check vehicles for dyed-diesel violations during the temporary relief period. However, statutory tax obligations remain. The Department of Revenue advises that only agricultural users with a valid agricultural exemption certificate should fuel with dyed diesel for on-road use at this time. Sellers must retain a properly completed certificate. Non-agricultural users remain subject to applicable state and municipal sales taxes.
Iowa: A temporary state proclamation suspends dyed-diesel restrictions and penalties for vehicles hauling specified agricultural products on Iowa public roads. Covered loads include livestock, livestock feed, corn, soybeans, hay, silage, fertilizer, manure and other farm products. Certain related tax provisions are also suspended for qualifying use. This relief does not establish a blanket exception for every farm vehicle or farm-related trip.
Before fueling, confirm that your vehicle, use and route qualify, and retain fuel receipts and required exemption documentation. Permission in one state does not carry across state lines. Federal relief covers October 5–December 31, 2026; be sure to monitor state guidance for changes and applicable expiration dates.