&imwidth=800&imheight=600&format=webp&quality=medium "Trump opens tax-free red diesel sales to all amid rising fuel prices as midterms near")
US President Donald Trump on Monday signed an executive order allowing anyone in the United States to purchase tax-exempt red-dyed diesel, a fuel traditionally reserved for farm machinery and other off-road equipment. The move comes as gasoline and diesel prices rise amid the Iran war, creating additional economic pressure on Trump's Republican Party just weeks ahead of the US midterm elections.
Speaking at a rally in Nebraska, Trump said the order would officially waive the off-road requirement and allow anyone to purchase tax-free red-dyed diesel for any reason. Trump acknowledged that he was not familiar with the fuel, joking with supporters: “I don't know what the hell it is, but whatever it is, it's supposed to be very good.”
Red-dyed diesel is essentially the same fuel as conventional diesel, but it is exempt from federal highway fuel taxes because it has traditionally been intended for off-road uses such as farming, construction and industrial equipment. The executive order removes the previous restriction on who can purchase the fuel, potentially allowing consumers and businesses to use the lower-cost diesel for a broader range of purposes.
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According to a fact sheet released by the White House, the order will temporarily allow off-road ‘dyed’ diesel for highway use and defer the applicable Federal excise tax, lowering costs for Americans. The fact sheet said the order directs the Treasury secretary, in consultation with the secretary of defense, to defer payment of the federal tax on dyed diesel used on highways through the end of the year. The deferred taxes would not accrue interest or penalties.
The Treasury secretary is also instructed to explore pathways to eliminate the obligation to pay the deferred taxes, according to the White House. Diesel prices have surged sharply since the start of the Iran war. According to AAA, the national average rose from $3.76 per gallon before the conflict to a record $6.53 on September 22. The average price stood at $6.32 per gallon on Monday. Under normal rules, federally taxed on-road diesel carries an excise tax of 24.4 cents per gallon. State governments impose additional diesel taxes, averaging 35.5 cents per gallon, according to federal data.
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