Federal Diesel Fuel Relief Does Not Eliminate Wisconsin’s Dyed Diesel Restrictions

Wisconsin Farm Bureau Federation is reminding farmers that President Trump's recent executive order providing temporary federal diesel fuel tax relief does not override Wisconsin's existing motor fuel tax law and dyed diesel use penalties.

On Monday, October 5, President Trump signed an executive order aimed at providing relief from high diesel fuel prices.

The order directs federal agencies to take steps to provide temporary relief from certain federal taxes and penalties associated with using dyed diesel on public roads through the end of the year.

However, the President's executive order does not override Wisconsin law.

Wisconsin's motor fuel tax requirements and penalties for using dyed diesel on public roads are established in state statute. Under Wisconsin law, the penalty for using dyed diesel on public roads is $1,000 or twice the amount of unpaid fuel tax, whichever is greater. This state penalty remains in effect despite the President's executive order.

Since the announcement, Wisconsin Farm Bureau has been reviewing the legal implications of the order and has met with members of the Legislature, Legislative Council and the Governor's office to determine whether similar relief could be provided in Wisconsin.

Based on that review and confirmation with Legislative Council, the Governor does not have the authority to suspend those statutory requirements through executive action. Changing or suspending them would require legislative action.

At the federal level, the order directs the IRS not to impose federal penalties for on-road use of dyed diesel through the end of the year. It also calls for postponing collection of federal fuel taxes on undyed diesel without interest or penalties and directs the administration to explore whether those taxes can ultimately be forgiven. Forgiving the underlying federal taxes would likely require congressional action.

Wisconsin Farm Bureau's guidance to members is not to assume the executive order makes dyed diesel legal for on-road use in Wisconsin. Federal penalty relief does not eliminate the potential state tax and penalty.

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