Federal Diesel Tax Relief Reaches the One Piece Texas Could Not Waive: What Executive Order 14435 Directs, and What Has Not Issued Yet

What Changed, and When

Executive Order 14435, “Emergency Tax Relief on Diesel Fuel,” was signed on October 5, 2026 and published in the Federal Register on October 9, 2026 at 91 FR 64747. By its own text, the order directs the following:

• A conditional deferral of federal diesel excise tax. If the Treasury Secretary determines that relief is authorized under 26 U.S.C. Section 7508A — including that a qualifying event occurred, and which taxpayers are affected — the Secretary is to defer payment of certain diesel excise taxes under 26 U.S.C. Section 4041 incurred October 5 through December 31, 2026.
• No penalties or interest on the deferred amounts, to the extent the law allows.
• An IRS announcement on the dyed-fuel penalty. The order directs the IRS to announce that it will not impose certain penalties under 26 U.S.C. Section 6715 on dyed diesel sold for, or used on, the highway during the same period, and to address relief from penalties for missed semimonthly deposits of that tax.
• Implementing guidance. The Secretary is to issue guidance specifying the relief and its conditions, the legal basis, the covered taxpayers and activities, the beginning and ending dates, and the date by which the postponed taxes must be paid.
• A five-day clock on the determinations. The determination and the direction to the IRS are each to occur within five days of October 5, 2026.
• A look at ending the deferred obligation. The Secretary is to explore avenues, including legislation, to end the obligation to pay the deferred amounts. By its terms the order itself leaves that obligation in place.
• Inspection resources, transportation and agriculture. The Secretary is to assess how the IRS allocates fuel-tank inspection and sampling resources during the period and announce that determination publicly. The FMCSA Administrator is to coordinate with states, industry and labor while continuing compliance enforcement. The Agriculture Secretary is to coordinate dyed diesel distribution for farm use in high-demand areas.

What had not issued as of the morning of October 9, 2026. The IRS list of news releases for the current month showed no diesel excise tax or dyed-fuel item. The Energy Marketers of America, reporting to fuel marketers on October 6, wrote that the order does not itself authorize highway sales or on-highway use of dyed diesel, that whether relief applies and to whom depends on Treasury determinations and guidance that had not been issued, and that no EPA waiver for visible red dye had issued either. That trade report put the federal diesel excise tax at 24.4 cents per gallon. The White House fact sheet describes savings of over $100 per refill for truckers, and High Plains Journal reported a USDA estimate of roughly $640 million in combined federal and state savings across about 224.6 million harvested acres.

Who in Texas This Reaches

The order is national and names no states or counties. Covered taxpayers are to be identified by the Treasury Secretary in the determination and the guidance. That said, Texas sits at the center of the two groups the order names, and Texas is one of the states that had already acted on its own side of the question:

• Farmers and ranchers who buy dyed diesel for off-road equipment and now have a question about the on-road truck in the same yard.
• Independent truckers and small fleet owners, for whom the deferred excise tax and the dyed-fuel penalty are two different exposures on the same gallon.
• Fuel distributors, jobbers and retailers, who decide what may lawfully be sold, to whom, and on what records — and who may carry the deferred tax when the window closes.
• Officers, employees and agents of a business entity. Section 6715 reaches them for willful participation in a violation, on a joint and several basis.
• Texas operations already relying on the state proclamation. Texas was among the states the Energy Marketers of America listed as having issued emergency dyed-fuel relief, alongside Alabama, Arkansas, Indiana, Louisiana, Missouri, Nebraska, North Carolina, North Dakota and Oklahoma, with the scope of those orders varying by state.

What This Changes Legally

A deferral is a postponement. The order directs that payment be deferred and that the guidance set the date by which the postponed taxes must be paid, and separately directs the Secretary to explore legislation to end the obligation. Until some later action removes it, the liability is understood to remain. The Energy Marketers of America told its members that fuel marketers could be liable for the 24.4 cents per gallon when the deferral ends, and advised documenting sales and customer use while the guidance is pending.

Penalty non-enforcement is not the same thing as a change in the law. Section 6715 remains on the books; the order directs an announcement that certain penalties will not be imposed during a stated period. The penalty amount in the statute is the greater of $1,000 or $10 for each gallon of dyed fuel involved, rising for repeat violations. What an announcement covers, and what falls outside it, is a question about the text of the announcement.

Fuel standards sit in a different body of law from fuel tax. Visible red dye in highway diesel is generally prohibited absent an EPA waiver, and highway diesel is subject to the 15 parts-per-million ultra-low sulfur standard. A tax deferral and a penalty announcement from Treasury are silent on the Clean Air Act. The September 28 Texas proclamation requested a federal waiver and conditioned the Texas Low Emission Diesel suspension on EPA authorization, as covered in our September 29 post on that proclamation.

The state layer did not disappear. State fuel taxes, licensing and reporting requirements, and state dyed-fuel prohibitions apply unless a state has separately suspended them. Texas suspended Texas Tax Code Section 162.235 by the September 28 proclamation, which the Texas Tribune reported runs 30 days and may be extended. A federal window running to December 31 and a state window measured in days from September 28 are not the same window.

Enforcement continues during the period. Section 6 of the order directs the FMCSA Administrator to continue compliance enforcement, and Section 5 asks for an assessment of how the IRS allocates fuel-tank inspection and sampling resources rather than a suspension of inspections.

The order states that it creates no enforceable rights. Section 9 provides that the order is not intended to, and does not, create any right or benefit enforceable at law or in equity against the United States. A person who relied on the order and later receives a notice is in a different position from a person holding a written determination that applies to them.

Private contracts are untouched. Carriers, shippers, lenders and insurers write their own compliance requirements into agreements, and a contract term is not deferred by an executive order.

What Kind of Option Might Apply

Nothing on this page is legal advice, and nothing here says whether any particular operator, load, sale or fill-up is covered by the order or by any guidance that follows it. What an experienced Texas attorney can review, against the actual documents and the actual operation, includes:

• How the federal deferral, the pending IRS announcement and the Texas proclamation line up for one vehicle, one driver and one load, including where the windows differ in length.
• What the Treasury guidance says once it issues, including who the covered taxpayers are and the date the postponed tax comes due.
• What records support a good-faith position if a purchase, a sale or a road use is later questioned by the IRS or the Texas Comptroller.
• Who carries the deferred 24.4 cents per gallon as between a distributor, a retailer and a customer, and what the invoices and contracts already say about that.
• Semimonthly deposit obligations during the period, and what the announced deposit-penalty relief does and does not reach.
• A penalty notice, assessment or citation already received, and what the response window and the appeal path look like.
• Officer, employee and agent exposure under Section 6715 given its willful-participation and joint-and-several terms.
• Fuel-standard questions that sit with the EPA rather than with Treasury, including dye visibility and the sulfur standard.
• What happens at the end of the period, including fuel already bought and already in a tank.

Why Acting Quickly Can Matter

A relief period that is defined by dates is also judged by them. Conduct in the middle is measured against the rule in force on the day the fuel changed hands, and fuel questions are usually reconstructed later from paper — fuel receipts, delivery tickets, dyed-fuel sales records, trip and dispatch logs. That record is at its most complete while the period is open, rather than months afterward when a notice arrives and the tickets have to be found.

The guidance the order calls for is where the operative answers are expected to live, including the date the postponed tax becomes payable. A business that reads that guidance when it issues has more room to adjust invoices, recordkeeping and contract terms than one that reads it after the payment date has passed.

Tax and penalty notices at both the federal and state level carry their own response deadlines, which run from the date on the notice rather than from the day someone understands what it says. An attorney reading a notice inside its response window is in a different position from one reading it after the window has closed.

Sources

1. Executive Order 14435, “Emergency Tax Relief on Diesel Fuel,” signed October 5, 2026, published October 9, 2026, 91 FR 64747 (primary document; deferral under Section 7508A, Section 6715 penalty announcement, October 5 to December 31, 2026, five-day determinations, guidance contents, FMCSA enforcement, Section 9 no enforceable rights).
2. 26 U.S.C. Section 7508A (the authority the deferral is conditioned on).
3. 26 U.S.C. Section 6715, Dyed fuel sold for use or used in taxable use, etc. (penalty of the greater of $1,000 or $10 per gallon; joint and several liability for officers, employees and agents).
4. 26 U.S.C. Section 4041 (the excise tax provisions the order names).
5. Energy Marketers of America, Regulatory Report, October 6, 2026 (24.4 cents per gallon; determinations and guidance not yet issued; no EPA dye waiver; deferral is not elimination; state-by-state list including Texas; ultra-low sulfur standard).
6. High Plains Journal, “President Trump issues executive order on emergency diesel tax relief,” October 6, 2026 (five-day deadline; USDA estimate of about $640 million across roughly 224.6 million harvested acres).
7. The White House, fact sheet on diesel affordability, October 2026 (savings of over $100 per refill as described by the administration).
8. Internal Revenue Service, news releases for the current month (checked October 9, 2026; no diesel excise tax or dyed-fuel release listed).
9. Texas Tax Code, Section 162.235, Use of Dyed Fuel Prohibited (the state prohibition suspended by the September 28, 2026 proclamation).
10. Office of the Texas Governor, “Governor Abbott Waives Dyed-Diesel Restrictions,” September 28, 2026 (state suspension; the federal fuel tax was not waived).
11. The Texas Tribune, “Abbott declares disaster in Texas over diesel prices, waives restrictions on commercial shipping,” September 28, 2026 (30-day duration of the state proclamation).
12. Texas Comptroller of Public Accounts, diesel fuel tax information (state administration of the motor fuels tax).