President Donald Trump signed an executive order on Oct. 5 directing the Treasury secretary to use legal authority to defer certain diesel fuel tax payments and provide penalty relief, if the department determines relief is authorized under federal law.
The order says Treasury has five days to decide whether a qualifying event occurred under 26 U.S.C. 7508A and which taxpayers were affected. If that determination is made, deferred payment would apply to certain diesel fuel taxes imposed by 26 U.S.C. 4041(a)(1)(A) or 26 U.S.C. 4041(b)(1)(B) that are incurred from Oct. 5, 2026, through Dec. 31, 2026.
The order also directs the Internal Revenue Service to announce within five days that it will not impose certain penalties under 26 U.S.C. 6715 for dyed diesel fuel sold for use or used on the highway during the same period, and that the announcement should address relief tied to semimonthly deposits.
Treasury is also instructed to issue implementing guidance spelling out the relief, any conditions, the legal basis, covered taxpayers and other covered details, along with the beginning and ending dates of each period and the date by which postponed taxes must be paid. The order says Treasury should explore avenues, including legislation, to eliminate the obligation to pay the deferred amounts, but it does not itself erase those taxes.
