USDA Secretary Rollins Urges Governors to Join Diesel Tax Relief

U.S. Secretary of Agriculture Brooke L. Rollins asked state governors on Wednesday to adopt their own diesel fuel tax relief measures. The request follows a federal executive order that lowered the cost of dyed diesel for highway use. Rollins spoke from Washington, D.C., where she addressed the current status of the initiative.

The federal action began on October 5, 2026, when President Donald J. Trump signed Executive Order 14435. The order, supported by Vice President J.D. Vance, directs the Treasury Department and the Internal Revenue Service to provide temporary penalty relief. It also suspends enforcement of federal excise taxes on off-road dyed diesel used on highways. This change is designed to lower fuel costs for drivers and operators.

Rollins stated that she thanked the president and vice president for their leadership. She also commended the governors who have already acted. According to Rollins, these actions help ensure that relief reaches producers who need it most during the harvest.

"Their leadership is an important part of ensuring this relief reaches the producers who need it most," Rollins said. "For the remaining states, I respectfully encourage their governors to join us in taking corresponding action on dyed diesel alongside the Trump Administration."

USDA estimates the combined federal and state savings will exceed $640 million. The department calculated this figure based on the federal diesel excise tax rate of 24.4 cents per gallon. The savings apply to approximately 224.6 million harvested acres across the country.

The IRS published specific guidance to implement the federal relief. On October 14, 2026, the agency issued guidance document IR-2026-122. This document clarifies that the IRS will suspend enforcement and collection of the federal dyed diesel excise tax during the relief period. It also waives the penalty for on-road use of dyed diesel. A second guidance document, IR-2026-125, issued on October 21, 2026, provided additional relief from federal reporting and recordkeeping requirements.

Thirty-one states have taken or announced actions related to dyed diesel. These measures include suspending penalties, modifying enforcement practices, or reducing other burdens on agricultural producers. Rollins encouraged the remaining governors to give full and fair consideration to similar steps. USDA said it will continue working with state leaders to support implementation and ensure access to the available relief.