Trump Allows Red Diesel on Roads, But Not Yet in Montana
If you own a diesel pickup in Montana, President Trump's executive order issued October 5th most likely caught your eye. Especially after hearing the phrase "tax-free red diesel" and "using public roads" in the same sentence.
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However, before you begin sucking fuel from your ranch tractor to fill up your pickup truck, the state of Montana wants you to know: slow down. On October 5th, President Trump signed an executive order that is designed to give immediate relief to individuals experiencing very high diesel prices. One of the key areas within this executive order addresses relief from the U.S. Treasury Department related to federal penalties associated with using dyed diesel on highways through the end of 2026. This executive order also instructs the U.S. Treasury Department to investigate and identify potential federal diesel excise tax payment deferment opportunities during the same period
What's the Big Deal With Red Diesel?
If you have spent any amount of time around Montana farms, ranches, or any type of heavy equipment operation, you most certainly have witnessed or been exposed to red-dyed diesel. There is no difference in terms of content between regular diesel fuel and red-dyed diesel, except for the added colorant (red dye) to signify that this specific product is intended for use in qualifying off-road applications where certain highway-related taxes do not apply. Meaning, if you were to put red-dyed diesel into your tractor, that is fine! However, if you were to put red-dyed diesel into your pickup truck for travel on highways under typical conditions, then you are breaking the law.
In Montana, the federal diesel excise tax is currently set at $0.244 per gallon. Therefore, delaying collection of such taxes could translate into significant cost savings for persons consuming large quantities of diesel fuel. The White House states that the purpose of the current executive order is to provide relief to farmers, ranchers, truckers, and others utilizing diesel fuel in their daily operations due to increased costs associated with purchasing diesel fuel.
Montana Says the Rules Haven't Changed Here
Where Montana differs from other states is in its position regarding allowing red-dyed diesel to be utilized on public roads. As previously mentioned above, Montana's laws prohibiting the use of dyed diesel on public roads remain unchanged. Specifically, this is the case since Mr. Trump's executive order only pertains to federal taxes collected by the United States government and federal authority and does not negate any existing state regulations or laws. Also, the executive order specifically requests that the federal government urge all states to enact similar legislation as well. Currently, several states have relaxed their enforcement practices relative to the use of red-dyed diesel on public roads, including South Dakota and Iowa.
As of right now, Montana has taken no action toward relaxing its enforcement of people using red-dyed diesel.
So while your buddy in another state might suddenly be running the same red stuff through his pickup that he uses in the tractor, doing the same thing here could still get you in trouble under Montana law.
Maybe Keep Filling Up With the Clear Stuff
Additionally, there will be additional federal guidelines provided later. The Treasury Secretary was given 5 business days to detail specifically how the tax deferrals and penalty relief will operate (i.e., who is eligible and when deferred taxes must be paid). Additionally, Mr. Trump's executive order directed the Treasury Secretary to investigate possible forgiveness options for deferred taxes.
Until Montana issues further guidance on this topic, I would suggest leaving the red-dyed diesel in your tractor.
Saving a few dollars at the pump sounds like a great deal.
Explaining to someone on the side of Highway 93 why "the President said I could" won't be near as enjoyable.
Most valuable crops grown in Montana
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