Arkansas Governor Sarah Huckabee Sanders has issued an executive order allowing farmers and loggers to use tax-free dyed diesel in their on-road trucks without facing state penalties through October 30. The emergency measure is aimed at providing financial relief as diesel prices continue to surge amid global instability.
The order comes in response to sharp increases in diesel costs, which averaged $6.38 per gallon nationwide as of Monday, compared to $3.75 a year ago, according to the U.S. Energy Information Administration. Many Arkansas producers had planned their budgets expecting diesel costs of $2.46 per gallon, the University of Arkansas noted. Diesel price spikes have been partially attributed to ongoing geopolitical tensions, including the war in Iran.
Under normal circumstances, Arkansas law imposes strict penalties for using dyed diesel—meant for off-road machinery such as tractors and logging equipment—in on-road vehicles. Violations incur not only the unpaid tax but also a $10-per-gallon fee. The governor’s order temporarily waives these penalties for specific vehicles owned and operated by farming or logging businesses. Eligible trucks must meet these conditions:
- Be categorized as a medium- or heavy-duty vehicle. - Be registered in Arkansas. - Be primarily used for farming or logging operations. - Not be registered under the International Fuel Tax Agreement (IFTA).
The relief measure allows farmers and loggers to use fuel already stored at their sites for the duration of Arkansas’ harvest season, which extends into November, and year-round logging operations. The emergency order is set to expire on October 30 unless further action is taken by the governor.
Sanders also directed the Arkansas Department of Finance & Administration (DFA) to seek federal penalty waivers from the Internal Revenue Service (IRS). The DFA is required to submit this request within three business days of the order.
While the temporary policy applies only to state penalties, the move has been welcomed as a necessary step to provide immediate cost relief for important agricultural and logging sectors.