Trump orders Treasury to weigh deferring diesel fuel tax payments

WASHINGTON, Oct 5 — President Donald J. Trump on Oct 5 signed an order directing the Treasury Secretary to defer certain diesel fuel tax payments and provide penalty relief to the extent permitted by law, if the secretary determines the relief is authorized.

The order says that within 5 days the Treasury Secretary, consulting the Secretary of War as appropriate, shall determine whether relief is authorized under 26 U.S.C. 7508A. That includes whether a qualifying event has occurred and which taxpayers have been affected by it.

If the secretary makes those determinations, the order says, the secretary shall defer payment of 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. Under the order, deferred amounts would carry no penalties, interest, additional amount or addition to the tax, to the extent authorized by law.

The order says restricted global diesel supply has led to rising prices and that farmers and truckers have been "particularly hard hit."

"This targeted action will put money directly in the pocket of American farmers, truckers, and workers, to support their vital service to our Nation," the order said.

The order also says the secretary shall direct the Internal Revenue Service, within 5 days, to announce that it will not impose penalties under 26 U.S.C. 6715 when dyed diesel fuel is sold for use or used on the highway during the same period.

Under the order, the secretary shall issue guidance that sets out the relief and the date by which postponed taxes must be paid. The secretary shall also explore avenues, including legislation, to eliminate the obligation to pay the deferred amounts.

The order directs the Secretary of Agriculture to coordinate with agricultural stakeholders to ensure adequate distribution of dyed diesel in high-demand areas.