October 15, 2026
Carolina Logger,
Please see the information below from the American Loggers Council on the IRS Ruling for fuel tax.
The Internal Revenue Service (IRS) announced on October 14, 2026, that it will temporarily suspend federal penalties associated with the use of dyed diesel fuel in highway vehicles. The announcement follows President Trump's October 5 Executive Order, Emergency Tax Relief on Diesel Fuel.
The relief is retroactive to October 1, 2026, and remains in effect through December 31, 2026.
What This Means for Logging and Trucking Operations: Under the temporary federal relief:
Highway Use: The IRS will not impose federal penalties when dyed diesel fuel is sold for highway use or used in highway vehicles.
Federal Enforcement: Federal inspections of on-road dyed diesel fuel use will be suspended during the relief period.
Recordkeeping: The IRS will waive federal penalties related to certain recordkeeping and excise tax deposit requirements during the relief period.
Federal Fuel Taxes: The temporary suspension of federal penalties does not automatically eliminate federal excise tax obligations. Additional IRS guidance is expected regarding tax payment deferrals and whether those taxes may ultimately be forgiven.
Important: State Fuel Tax Laws Still Apply. The federal relief does not override state fuel tax laws or penalties. Logging contractors and trucking companies may still face state penalties for using dyed diesel in highway vehicles, even when federal penalties are suspended. This is particularly important for logging operations transporting timber across state lines. Businesses should verify the requirements of each state in which they operate before using dyed diesel fuel in highway vehicles. While many states have adopted similar temporary relief measures, others have not.
Additional Guidance Expected
The IRS anticipates issuing additional guidance regarding federal excise tax payment postponements, potential forgiveness of deferred taxes, and reporting requirements, including Form 720 (Quarterly Federal Excise Tax Return).
ALC encourages members to review the IRS announcement, consult applicable state revenue agencies, and work with their fuel suppliers or tax professionals to understand how the temporary relief applies to their operations. Additional Guidance from Treasury has not been released and is necessary to understand the full scope of the Executive Order and any consequences associated with following it.
Please click below and take a moment to read the full IRS announcement.
