How could Trump's executive order on diesel fuel affect South Dakota's tax policy?
South Dakota may consider state fuel tax holiday after federal relief President Donald Trump's executive order temporarily suspends federal penalties for using dyed diesel fuel on public highways through December 31, 2026. This federal action prompted the South Dakota Department of Revenue to clarify its response, leading the South Dakota Farmers Union to request a special legislative session. The union is asking lawmakers to approve a temporary state fuel tax holiday, which would reduce the state tax on gasoline and diesel from 28 cents to 1 cent per gallon.
- Effect
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- When
- Within weeks
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How it reaches South Dakota
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Donald Trump issued an executive order directing the Internal Revenue Service to assess temporary payment deferrals and penalty relief for dyed diesel fuel used or sold on highways between October 5 and December 31, 2026. This federal action allows for temporary relief from diesel tax liabilities. Separately, Illinois issued an executive order directing its Department of Revenue and State Police not to impose penalties for qualifying agricultural use of red-dyed diesel through December 31st.
The full event10independent outlets -
The state Department of Revenue clarified its response to the federal order. This clarification, combined with complications surrounding dyed diesel use, led the South Dakota Farmers Union to ask the governor and state lawmakers to call a special legislative session. The Farmers Union is requesting legislation that would temporarily reduce the state tax on gasoline and diesel from 28 cents to 1 cent per gallon. This would allow for tracking of highway funding lost to the tax holiday.
1 report connects these two. Brind only summarizes; follow a link to read the reporting itself.
- gowatertown.net Oct 9
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The facts so far
As reported. Each one links to where it comes from.
- Trump’s order suspends penalties for unauthorized dyed diesel use through the end of the year.gowatertown.net
- The South Dakota Farmers Union asked the governor and state lawmakers to call a special legislative session.gowatertown.net
- The Farmers Union requested a temporary reduction of the state tax on gasoline and diesel from 28 cents to 1 cent per gallon.gowatertown.net
- The state Department of Revenue clarified its response to President Donald Trump’s Monday executive order.gowatertown.net
Why it matters
The potential tax holiday is critical for South Dakota farmers, who are already facing increased production expenses and low commodity prices. The Farmers Union argues that the complications surrounding dyed diesel usage place citizens, commercial operators, and agricultural producers in an unfair and precarious situation, making the relief necessary.
This situation is not unique; gas and diesel prices have risen sharply since the beginning of Trump’s war in Iran, which has disrupted global fuel supply chains. In at least four other states—Georgia, Indiana, Ohio, and Utah—leaders have already moved to temporarily suspend or reduce the state tax on gasoline.
What we don't know yet
- Will the South Dakota Legislature approve the requested state fuel tax holiday?
- What specific conditions would be placed on the temporary reduction of the state fuel tax?
Is this still moving?
- Reports
- 18
- Developments
- 8
- Repetition
- 61%
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Other possible ripples from the same event.
Reporting
All 10 outlets- gowatertown.netOct 9
- wfiwradio.comSaturday
- ibtimes.co.ukOct 12
- aginfo.netOct 9
- cities929.comOct 7
- miragenews.comOct 1
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