Arkansas farmers and loggers will be able to keep running tax-free, dyed diesel fuel in their highway trucks through the end of the year.
Governor Sarah Huckabee Sanders signed Executive Order 26-16 on Friday, October 30, 2026, extending the state of emergency she declared in Executive Order 26-15 on September 29. The new order takes effect October 31 and runs through December 31, 2026, unless it is amended or extended.
What the Order Does
Dyed diesel is sold at a lower state tax rate because it is meant for off-road use, such as farm equipment. Under normal Arkansas law, the Department of Finance and Administration charges the extra tax plus a penalty of $10 per gallon on all the fuel a vehicle’s tank can hold if dyed diesel is found in a highway vehicle, or if dyed and undyed diesel are mixed.
The executive order suspends those penalties. No state agency or officer may assess them for conduct covered by the order while it is in effect.
The suspension applies to dyed diesel used in:
- Class 2, 3, 4, 5, 6 or 8 motor vehicles as defined in Arkansas law
- Motor vehicles registered in Arkansas that are not licensed under the International Fuel Tax Agreement
Why the Governor Says It Is Needed
The order points to high diesel prices. It says the average retail price of diesel in Arkansas is $5.90 per gallon, while the University of Arkansas Cooperative Extension Service built its 2026 crop budgets on an assumed price of $2.46 per gallon.
It also cites U.S. Energy Information Administration figures showing national distillate inventories were 13% below the 5-year seasonal average as of September 11, 2026.
Farmers and timber harvesters already keep dyed diesel in on-farm and on-site storage for off-road use. The order says letting them use that fuel in highway vehicles makes fuel immediately available to those operations.
Harvest is still underway. The order notes Arkansas planted 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 in 2026, with harvest and delivery regularly stretching into November.
Agriculture and Timber Drive the State Economy
According to the order, agriculture is Arkansas’ largest industry, contributing more than $25.6 billion a year and providing more than 248,000 jobs. The state’s 37,200 farms and ranches cover 13.6 million acres, and forestland covers about 18.8 million acres, with farming and forestry in all 75 counties.
Arkansas is the most forestry-dependent economy among southern states, with forest industries contributing $7.3 billion and operating year-round.
Matches Federal Relief
The state order follows President Donald J. Trump’s Executive Order 14435, Emergency Tax Relief on Diesel Fuel, signed October 5, 2026. That order suspends federal penalties and enforcement for certain uses of red-dyed diesel through December 31, 2026.
SOURCE: Office of Governor Sarah Huckabee Sanders, Executive Order 26-16
HAVE INFORMATION YOU WOULD LIKE TO SHARE? Share your community news, announcements, sports results, and upcoming events with the ArkansasRadio.com family of radio stations. Submit your event at
To report a typo, please email newsarkansasradio@gmail.com
Leave a Reply