Arkansas Food Assistance Information
Scheduling Request

Newsroom

Back to All News

Newsroom

Home › Sanders Signs Executive Order Allowing Farmers, Loggers to use Tax-Free, Dyed Diesel Fuel on Highways

Sanders Signs Executive Order Allowing Farmers, Loggers to use Tax-Free, Dyed Diesel Fuel on Highways


TO ALL TO WHOM THESE PRESENTS COME – GREETINGS:           
 
EO 26-15: EXECUTIVE ORDER DECLARING A STATE OF EMERGENCY AND TEMPORARILY SUSPENDING CERTAIN MOTOR FUEL-RELATED PENALTIES, AS AUTHORIZED BY ARK. CODE ANN. § 12-75-114 
 
WHEREAS:   The Governor is responsible, to the maximum extent possible, for the people and property of the state, pursuant to Ark. Code Ann. § 12-75-114;
 
WHEREAS:   The citizens of Arkansas face an unforeseen hardship in the agriculture and forestry industries as a result of the increased price of diesel fuel;  
 
WHEREAS:   The 2026 crop enterprise budgets published by the University of Arkansas Cooperative Extension Service were prepared using an assumed diesel fuel price of $2.46 per gallon, which is less than half the price presently prevailing in this State;
 
WHEREAS:   The average retail price of diesel fuel in Arkansas has surpassed the price assumptions in the University of Arkansas Cooperative Extension Service’s 2026 crop enterprise budgets;
 
WHEREAS:   According to the U.S. Energy Information Administration, U.S. distillate inventories were 13% below the five-year seasonal average as of September 11, 2026, and global production of distillate fuel is assumed to remain below last year’s levels;
 
WHEREAS:   Agriculture is Arkansas’ largest industry, contributing more than $25.6 billion annually to our state’s economy and providing over 248,000 jobs in the state. Our diverse agricultural production includes row crops, forestry, livestock, poultry, aquaculture, and specialty crops;
 
WHEREAS:   Arkansas consistently ranks in the top 25 nationally in the production of more than 13 different agricultural commodities and ranks in the top ten nationally in the production of rice, broilers, turkeys, cotton, cottonseed, catfish, peanuts, eggs, and soybeans; 
 
WHEREAS:   Arkansas’ 37,200 farms and ranches operate on 13.6 million acres, and forestland covers approximately 18.8 million acres, with agricultural and forestry operations occurring in all 75 counties within the state;
 
WHEREAS:   In 2026, Arkansas’ reported crop acreage included 3,416,500 acres of soybeans, 885,600 acres of rice, 750,000 acres of corn, 551,000 acres of cotton, 65,400 acres of wheat, and 38,700 acres of peanuts, with crop harvest and delivery regularly extending into the month of November;
 
WHEREAS:   Arkansas’ economy is the most forestry-dependent of all the southern states, with forest industries contributing $7.3 billion to the state’s economy and operating year-round;
 
WHEREAS:   Arkansas farmers and timber harvesters maintain on-farm and on-site storage of dyed diesel fuel for nontaxable off-road use, and allowing that fuel to be used in highway vehicles engaged in agricultural and timber harvesting operations will make fuel immediately available to those operations;
 
WHEREAS:   President Trump declared a national emergency in Executive Order 14156, finding “an affordable and reliable domestic supply of energy is a fundamental requirement for the national and economic security of any nation,” and President Trump has extended this emergency declaration through January 20, 2027; 
 
WHEREAS:   Ark. Code Ann. § 12-75-114(e)(1) authorizes the Governor to suspend any regulatory statutes if compliance with those statutes would delay action in coping with the declared emergency;
 
WHEREAS:   Strict compliance with certain statutes would hinder necessary action in coping with the emergency in all seventy-five (75) counties in Arkansas;
 
WHEREAS:   Ark. Code Ann. § 26-56-224 provides that dyed distillate special fuel may be sold at a lower state excise tax rate than undyed fuel, if the dyed distillate special fuel is used in a motor vehicle that is used for off-road purposes. Ark. Code Ann. § 26-56-225 prohibits dyed distillate special fuel from being used in the fuel supply tank of any motor vehicle with certain exceptions including state and local government vehicles, local transit and intercity buses, and school buses;
 
WHEREAS:   Ark. Code Ann. § 26-56-226(a)(1) provides that if the Department of Finance and Administration (DFA) discovers a motor vehicle not excepted in § 26-56-225 using dyed distillate special fuel, that DFA shall assess additional tax and a penalty of ten dollars ($10.00) per gallon on all the fuel that could be contained in the fuel supply tank or tanks of the motor vehicle, if filled to capacity; and
 
WHEREAS:   Ark. Code Ann. § 26-56-227(a) prohibits mixing of dyed distillate special fuel with undyed distillate special fuel in the fuel supply tank of any motor vehicle, except those motor vehicles excepted in § 26-56-225. Ark. Code Ann. § 26-56-227(b) provides that if DFA discovers any fuel supply tank of a motor vehicle containing mixed dyed and undyed distillate special fuel, except those motor vehicles excepted in § 26-56-225, DFA shall assess additional tax and a penalty of ten dollars ($10.00) per gallon on all the fuel.  
 
NOW, THEREFORE, I, Sarah Huckabee Sanders, acting under the authority vested in me as Governor of the State of Arkansas, and pursuant to Ark. Code Ann. §§ 12-75-101, et seq., do hereby declare a state of emergency in Arkansas and order the following:  
 

  1. The penalty provisions of Ark. Code Ann. § 26-56-226(a)(1) and Ark. Code Ann. § 26-56-227(b) are hereby suspended to the extent that they subject any of the following to the penalties imposed under those sections:
    1. The use of dyed distillate special fuel in the fuel supply tank of a motor vehicle for the purpose of operating a motor vehicle that is not excepted under Ark. Code Ann. § 26-56-225; and
    2. The mixing of dyed distillate special fuel in the fuel supply tank of any motor vehicle, other than in the fuel supply tank of a motor vehicle excepted in § 26-56-225, with undyed distillate special fuel.  
  2. The suspension of the penalties set forth in Section 1 is applicable only to the use of dyed distillate special fuel in the fuel supply tank of a motor vehicle that meets the following conditions:
    1. The motor vehicle must qualify as a Class 2, Class 3, Class 4, Class 5, Class 6, or Class 8 motor vehicle as defined in Ark. Code Ann. § 27-14-601(a)(3);
    2. The motor vehicle must be owned and operated by an individual or business engaged in agricultural operations or forestry operations, and the motor vehicle must be primarily used for the purpose of carrying out the functions of the agricultural or forestry-related business;
    3. The motor vehicle must be registered in the State of Arkansas; and
    4. The motor vehicle is not a licensed vehicle under the International Fuel Tax Agreement as adopted in Ark. Code Ann. § 26-55-1101, et seq.  
  3. For purposes of this order, an “agricultural” operation is a business engaged in farming that produces food, fiber, grass sod, nursery products, or livestock in commercially marketable quantities. The business must demonstrate such activity through recent tax filings reporting farming income or, for newer operations, a business plan showing land, financing, and other resources sufficient to establish and operate a commercially viable farming operation.
  4. For purposes of this order, a “forestry” operation is a business engaged in the harvesting of timber starting with the severing of a tree from the ground through the point at which the tree or its parts in any form have been loaded in the field in or on a truck or other vehicle for transport to the place of use.
  5. No state department, agency, or officer shall assess the taxes and penalties imposed by Ark. Code Ann. § 26-56-226(a)(1) or Ark. Code Ann. § 26-56-227(b) against any individual or business for conduct within the scope and during the effective period of this Order. 
  6. The Secretary of the Department of Finance and Administration shall request dyed diesel fuel penalty relief from the Internal Revenue Service in accordance with Internal Revenue Manual 25.16.1.5, within three (3) business days of the effective date of this Order.
  7. All departments, agencies, boards, commissions, and officers of the State of Arkansas, or any political subdivision thereof, are authorized and directed to cooperate in actions taken by the State in accordance with this Order.
  8. This Order shall remain in effect from September 30, 2026, through October 30, 2026, unless otherwise amended or extended, pursuant to Ark. Code Ann. § 12-75-107(b)(2)(A).

IN TESTIMONY WHEREOF, I have hereunto set my hand and caused the Great Seal of the State of Arkansas to be affixed this 29th day of September, in the year of our Lord 2026.

###