Trump Orders Treasury to Review Diesel Tax Relief Through Dec. 31

President Donald Trump’s Oct. 5 order directs Treasury to determine whether federal law allows temporary diesel-tax relief and who qualifies, as the national average price reached $6.3207 per gallon, near its recorded high.

Treasury has five days to make those determinations. If it finds the relief authorized, the department is directed to defer specified federal fuel-tax payments incurred from Oct. 5 through Dec. 31, without penalties or interest to the extent permitted by law.

The order also directs Treasury to have the Internal Revenue Service (IRS) announce within five days that it will not impose specified penalties on covered sales of red-dyed diesel for highway use, or its use on highways, during the period. Treasury is to issue guidance on eligible taxpayers, conditions and payment deadlines.

Dyed diesel is marked for off-road uses such as agriculture and construction. The administration describes the order as temporarily allowing that fuel on highways, but access depends on Treasury’s eligibility determinations and implementation guidance; the order does not establish immediate access for every driver or business.

The administration estimates truckers could save more than $100 per refill where states take corresponding action. Whether states will do so remains unsettled. The order encourages states to adopt matching measures.

The order directs Treasury to explore ways to eliminate the deferred tax obligation, but does not itself cancel it. Trump said, “This order will also drive down the costs of all goods, including groceries.”

The national average diesel price stood at $6.3207 per gallon on Oct. 5, below the $6.5276 record recorded Sept. 22. Treasury’s determinations are due within five days of the order.