STURGIS, S.D. – Ranchers and farmers using red-dyed diesel on the road should understand that the recently announced tax relief is a deferral, not a permanent tax break. Mike Steenhoek, executive director of the Soy Transportation Coalition, says President Trump’s executive order directs Treasury to defer certain federal diesel tax obligations for qualifying fuel used between October 5 and December 31, without penalties or interest. “What we’re looking at is a temporary deferral.” explained Steenhoek. “Some of the other states, they’ve used the language suspension. So, you really have to kind of go through the weeds to see what that actually means. If it’s a deferral, then your basically just delaying the tax that you need to pay. So, it might take the edge off in the harvest and cattle shipping season of 2026, but the bill is going to come due in early 2027. He added, “Now of course, rancher and farmer organizations are strongly encouraging that the deferral becomes an actual waiver, because if you’re really going to provide some relief, you want that tax bill to not have to be paid, instead of just simply deferred.” For ranchers and farmers, the savings depend on purchasing additional dyed diesel during the relief period. Previous purchases of taxed diesel would not qualify. Consider a farmer who purchases 2,000 gallons of red-dyed diesel for both on-road and off-road needs. Using the federal diesel tax rate of 24.4 cents per gallon, that would defer about $488 in federal taxes. State taxes vary, and ranchers and farmers would need to follow their state’s rules. Even with some tax savings, Steenhoek says fuel costs are difficult because they’re unavoidable. “It’s not something that you can even really defer the consumption of diesel,” says Steenhoek. “It’s not like a piece of machinery that maybe you’ve wanted to purchase and, but because prices are so high, you’ll say, well, I’m going to continue to use my current machinery. I’m going to defer buying a new piece of machinery until next year. You know, with diesel fuel, when it’s time to harvest or ship cattle it’s game time. You can’t defer that.” Share via: Facebook Twitter LinkedIn More