FAQs on Executive Orders to Alleviate Diesel Price Pressure for Producers and Agriculture Haulers

1. Does the executive order allow a highway-registered farm pickup, farm truck or other agricultural vehicle to use dyed/red diesel tax-free, regardless of whether it is hauling an agricultural product?

Yes, a licensed vehicle may use dyed/red diesel tax-free provided they do in fact haul agricultural product. If they never actually transport Nebraska agricultural product they would not qualify for this relief.

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2. How do we distinguish between personal use and agricultural hauling?

The exemption does apply to personal vehicles provided the vehicle is used to haul Nebraska agricultural product. If filing the Form 84AG, the farmer or rancher can only request a refund on the miles used related to hauling Nebraska agricultural product.

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3. Can you clarify whether the executive order suspends the ¼-cent-per-gallon tax created by LB 815 beginning October 1? If so, what happens to the revenue LB 815 directs to the Agricultural Alcohol Fuel Tax Fund during those 90 days?

The $0.0025 per gallon tax paid on dyed diesel purchased beginning on October 1, 2026, as part of LB815 is eligible for a refund for the Nebraska miles traveled for agricultural purchases using the Nebraska Ag Use Motor Fuels Tax Refund Claim, Form 84AG and write EO 26-21 on the top of the form. The tax itself is not suspended.

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4. Where does the money for that refund come from? Would refunds of the LB815 tax reduce receipts to the Agricultural Alcohol Fuel Tax Fund (thus reducing funding for the NEB), or would they be charged to another state fund?

Most of the impact would be to the Highway Trust Fund with an impact also on the Nebraska Ethanol Board's Agricultural Alcohol Fuel Tax Fund and Motor Fuel Tax Enforcement and Collection Cash Fund.

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5. For those who will be submitting refunds for clear diesel, will that also include federal tax?

No this will not include federal tax, only state tax refund.

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6. Are agriculture producers allowed to run dyed fuel in their trucks transporting agricultural commodities on public roadways?

Yes, agriculture producers are able to use dyed diesel for hauling agricultural products.

Enforcement of dyed fuel at the roadside will be based on movement of products specified under the order. Any diesel-powered vehicle being used to move agricultural

products will be included. Any use of dyed fuel on Nebraska's roadways for uses other than those specified in the order will be subject to normal enforcement.

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7. Are pickups and service trucks used in agricultural production also allowed to use dyed diesel? If someone is driving a diesel truck to the field to do harvest, is that covered?

Yes, someone driving a diesel pickup or service truck to the field for harvest is covered.

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8. Burning red-dyed diesel fuel in highway vehicles violates federal law, subjecting violators to a $10-per-gallon penalty on their total fuel storage capacity, not just the fuel in the vehicles tank.

Correct, the Executive Order only applies to Nebraska penalties. However, Tax Commissioner Jim Kamm has asked the IRS to provide the same federal penalty relief.

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9. If a farmer is hauling agricultural goods on state highways, travels on interstate 80 for a short stretch, and then exits, are they disqualified from the waiver while on the interstate section?

Producers will be able to drive on the interstate system. Nebraska Tax Commissioner Jim Kamm is asking the IRS to provide the same federal penalty relief.

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10. Would it be simpler for farmers to apply for a state motor vehicle tax credit for fuel used in highway vehicles rather than using dyed fuel directly?

Producers can also seek tax relief in that way. The taxpayer may use clear diesel, then file a Nebraska Ag Use Motor Fuels Tax Refund Claim, Form 84AG to request the refund.

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11. Are commercial cattle haulers currently permitted to burn red-dyed fuel under the declaration - are commercial livestock haulers covered under the scope of this exemption?

Yes, for Nebraska miles traveled to transport Nebraska agricultural products, commercial livestock haulers are covered. Taxpayers who are registered under the IFTA program that transport Nebraska sourced agricultural products within Nebraska using tax-paid undyed diesel may report qualified Nebraska miles as nontaxable miles for the claimed period on their IFTA return to obtain a credit for the associated Nebraska miles.

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12. Does the executive order cover distillers grains and corn gluten?

Yes, if the distillers and/or gluten is being used to feed livestock.

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13. Does the executive order apply to rendered or animal protein?

No, these products are post-processing and do not qualify for exemption under the Executive Orders.

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