Farmers using red-dyed diesel on the road should understand the recently announced federal tax relief is a deferral, not necessarily a permanent tax cut. 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. No penalties or interest would apply during that period.

The order also directs federal officials to explore whether those deferred taxes can ultimately be eliminated. For farmers, the savings only apply to additional dyed diesel purchased during the relief period. Previously purchased taxed diesel would not qualify. For example, 2,000 gallons of dyed diesel at the federal tax rate of 24-point-4 cents per gallon would defer about 488 dollars in federal taxes. Soybean groups are urging officials to ultimately waive those deferred taxes rather than collect them later.

By: NATHAN STUEDLEFarmers using red-dyed diesel on the road should understand the recently announced federal tax relief is a deferral, not necessarily a permanent tax cut. 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. No penalties or interest would apply during that period.The order also directs federal officials to explore whether those deferred taxes can ultimately be eliminated. For farmers, the savings only apply to additional dyed diesel purchased during the relief period. Previously purchased taxed diesel would not qualify. For example, 2,000 gallons of dyed diesel at the federal tax rate of 24-point-4 cents per gallon would defer about 488 dollars in federal taxes. Soybean groups are urging officials to ultimately waive those deferred taxes rather than collect them later.

Red-dyed diesel tax relief is a deferral, not a waiver