Texas producers and landowners can now use red-dyed diesel on Texas public roads. However, tax treatment is different from highway-use restriction.
On Sept. 28, Gov. Greg Abbott issued a statewide disaster proclamation suspending Texas restrictions on the use of dyed diesel on highways. The proclamation does not waive the $0.20-per-gallon Texas motor fuel tax on dyed diesel used on the highway. The Texas Comptroller is working on guidance for how that tax should be remitted.
On Oct. 5, President Donald Trump signed an executive order directing the federal government to provide temporary relief for dyed diesel used on highways through Dec. 31. The Executive Order does not itself authorize highway sales or on-highway use of dyed diesel fuel. It only directs the Secretary of Treasury to defer certain federal diesel tax payments, if authorized, and directs the IRS not to impose certain penalties for highway use of dyed diesel during that period.
The order also encourages states to take similar action. Texas had already suspended its highway-use restriction through Gov. Abbott’s proclamation.
What this means for Texas landowners & ranchers: If you have legally purchased and stored dyed diesel, the Texas proclamation allows you to use that fuel in highway vehicles. However, the state tax has not been waived, and producers should watch for additional guidance from the Texas Comptroller on how the tax will be handled.
Purchasing dyed diesel: An agricultural producer must have the appropriate Texas Comptroller agricultural end-user number to purchase dyed diesel tax-free for qualifying agricultural, off-highway use.
Additional resources:
Gov. Greg Abbott’s disaster proclamation
President Trump’s executive order
Fact Sheet: President Donald J. Trump Promotes Diesel Affordability
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