President Trump’s executive order deferring federal diesel taxes aims to help farmers, but it’s more complicated than it seems and states are warning drivers that they may have to pay taxes later.
Transcription
AYESHA RASCOE, HOST:
President Trump signed an executive order at a campaign rally in Nebraska earlier this month intended to appeal to rural voters – making diesel cheaper. But it turns out it’s not that simple and it creates a lot of confusion, as South Dakota Public Broadcasting’s Jackson Dircks explains.
(SOUNDBITE OF TRUCK IDLE)
JACKSON DIRCKS, BYLINE: At a farm cooperative in Salem, South Dakota, population 1,300, Gerald Otte fills his big white 18-wheeler with soybeans. It burns diesel.
(SOUNDBITE OF RUNNING TRUCK)
GERALD OTTE: It’s a lot. I mean, that’s $2.50 more we’re paying. You know, we were at 3.50, and now we’re at 5.89. It’s a lot.
DIRCKS: This gas station is in an agricultural region. Otte can therefore choose between two types of diesel. A dyed red is 24.4 cents per gallon cheaper. That’s because it’s exempt from federal road taxes. It’s the same as regular diesel except for its color. It can only be used legally off-road, such as in tractors. Trump’s executive order states that it is now acceptable to fill up road vehicles with red diesel through the end of the year.
(SOUNDBITE OF RUNNING TRUCK)
OTTE: I think this pickup just did it.
DIRCKS: But Otte says his company told him to continue using regular, undyed diesel.
OTTE: They said I shouldn’t do it because they’ll probably come back and tax us on this red fuel one day.
DIRCKS: That’s because…
MOLLY NIXON: The president doesn’t really have the legal authority to tell the IRS not to collect the tax. Do not assess the tax.
DIRCKS: Molly Nixon is a senior fellow on executive power at the Cato Institute, a libertarian-leaning think tank. Trump’s order only postpones paying federal taxes. Businesses like Otte’s worry so if they buy untaxed red diesel now, they’ll get a bill later.
NIXON: So there’s some sort of recognition here that getting rid of the tax might take more than any one agency can do at this point – it might require legislation.
DIRCKS: South Dakota’s governor is also telling people not to fill their road vehicles with tinted diesel. He’s a Republican Trump fan who is running for re-election in a very pro-Trump state. But…
LARRY RHODEN: Ultimately, when the dust settles, we’ll take our time and make sure that no one gets caught in the whirlwind of unintended consequences, because it’s very confusing.
DIRCKS: And just as Trump tells the IRS not to penalize people for using dyed diesel, Rhoden is ordering state officials not to check gas tanks all year long. State Democrats, however, want Rhoden to call a special session to suspend the state’s 28-cent diesel tax. The South Dakota State Trucking Association sent out a flyer advising against changes to fuel practices due to uncertainty about potential tax liability.
Back at the Salem co-op, Scott fuels up a large diesel truck and drives it to a grain mill. It also doesn’t use the cheaper, red-dyed diesel.
SCOTT: Yeah. I heard that Trump agreed, but I don’t know if I have complete confidence in that, you know, unless they give you a piece of paper.
DIRCKS: Scott asked that we use only his first name because he said he has had negative experiences after being interviewed by the media and is concerned about his reputation in a small town. Trump has won this county by nearly 70% in the last three elections, but Scott is frustrated.
SCOTT: I think it’s stupid to have to pay over a thousand dollars to fill up your truck. Yeah, I remember this happening a few years ago, but it’s just ridiculous I think.
DIRCKS: On Wednesday, the IRS said it would not inspect vehicles or impose penalties on people using cheaper dyed diesel on highways for the rest of the year. He says, quote, “expect to provide additional guidance” on deferring the tax and to “explore ways to eliminate” the requirement to pay it. For NPR News, I’m Jackson Dircks in Salem, South Dakota.
(SOUNDBITE OF OSMAN’S “LOOK AT THE SKY”)
Copyright © 2026 NPR. All rights reserved. Visit the terms of use and permissions pages on our website at www.npr.org for more information.
The accuracy and availability of NPR transcripts may vary. The text of the transcript may be edited to correct errors or match updates to the audio. Audio on npr.org may be edited after its original broadcast or publication. The authoritative record of NPR’s programming is the audio recording.
Gn headline
