A Nebraska advocacy group is seeking an annual suspension of the state’s motor fuel taxes on gasoline and diesel during the fall harvest season, extending the proposed relief to farmers, ranchers and other drivers.
Eric Underwood, a former chairman of the Nebraska Republican Party who is now affiliated with Advocates for All Nebraskans, said the tax holiday would run from Labor Day through Halloween each year. He described the period as about 61 days. The proposal is being advanced separately from the federal government’s temporary relief for certain off-road diesel transactions.
“This has to be done for all Nebraskans, not just one group or the other,” said Eric Underwood.
Underwood’s proposal comes as federal officials expand an emergency initiative involving dyed diesel, a fuel generally used for off-road purposes. The federal effort followed an executive order President Donald Trump signed earlier this month in Grand Island. Nebraska Gov. Jim Pillen was among the first governors to take steps aimed at reducing diesel costs by suspending taxes, the Rural Radio Network reported.
Federal relief covers a separate category
The U.S. Department of Agriculture said Thursday that 31 states had taken or announced actions to complement the federal dyed-diesel initiative. Agriculture Secretary Brooke Rollins urged other states to take similar action while praising governors who had already responded.
The Internal Revenue Service issued guidance on Oct. 14 suspending enforcement and collection of the applicable federal excise tax during the relief period. The guidance also waived penalties tied to on-road use. Additional IRS guidance issued Oct. 21 relaxed reporting and recordkeeping requirements for transactions covered by the program.
- The federal diesel excise tax is 24.4 cents per gallon.
- The USDA estimated that the broader federal and state effort could produce more than $640 million in combined savings.
- The USDA figure is a projection, not a total of savings already realized.
The proposed Nebraska holiday would apply more broadly than the federal program by covering gasoline and diesel used by all motorists during the specified annual period. Underwood said the approach is intended to include agricultural users as well as people driving for everyday purposes.
Some economists have said much of the diesel used on farms is already exempt from taxation. Greg Ibendahl, an agricultural economist at Kansas State University, estimated that a typical grain farmer could save about $100 during the federal order’s three-month window if the deferred federal tax ultimately is not collected.
Underwood’s plan would instead establish a recurring state tax holiday tied to the fall calendar. The proposal is part of the work of Advocates for All Nebraskans and would affect the state taxes charged on gasoline and diesel during the proposed period.
