On Monday, October 20, Governor Patrick Morrisey declared a 60-day state of emergency across all 55 West Virginia counties and signed an executive order suspending penalties for the use of red-dyed diesel on the highway. His office put the savings at 20.5 cents a gallon, 'about $41 on a single fill-up,' and listed the industries it is meant for: coal, natural gas, agriculture, forestry and trucking, 'whether it's a truck hauling coal or transporting timber.' West Virginia was the latest of three Atlantic states to move in five days. On Friday, October 16, Virginia Governor Abigail Spanberger issued Executive Directive 5 authorizing dyed diesel on the road through December 31 for 'farmers, loggers, and haulers' and ordering the DMV to publish, by October 23, a process for paying the state tax on it and getting the penalty waived. On Tuesday, October 20, South Carolina's State Transport Police said they had suspended dyed-diesel inspections on commercial vehicles through December 31. And next door, North Carolina's Relief at the Pump Act, which zeroed the 41-cent state tax on gasoline and diesel from October 10 through November 30, has done exactly what it promised: AAA's North Carolina diesel average on October 21 was $5.60, the cheapest in the country, against a national average of $6.32. The relief map that covered the Plains and the Gulf two weeks ago now reaches the ocean. What it still does not cover is the one thing an interstate carrier cares about most: the state tax you owe on the miles, which IFTA says every one of these orders leaves in place.
The second wave, state by state
What each order actually says
West Virginia (October 20, effective immediately, 60 days unless ended earlier): a state of emergency in all 55 counties plus an executive order that suspends penalties 'tied to the use of red-dyed diesel on highways' and tells state agencies 'to stop fuel inspections aimed specifically at detecting its use.' Trucking is named as a beneficiary. The same release says 'West Virginia's motor fuel excise tax and commercial vehicle safety inspections remain in effect.' The 20.5-cent savings figure equals the flat-rate portion of West Virginia's motor fuel tax; how that squares with the tax 'remaining in effect' is not explained, and the order text was not published with the release. Treasurer Larry Pack had called for the move earlier the same day: 'Our farmers, loggers and timber haulers are facing extraordinary challenges in operating costs, and we must act now.' AAA West Virginia diesel: $6.34, up from $3.58 a year ago.
Virginia (Executive Directive 5, October 16 through December 31 unless extended): Spanberger's directive makes 'dyed diesel available for on-road use to keep equipment running, food and goods moving, and small businesses operating.' It does not waive the state tax. Under Virginia Code § 58.1-2225 the user pays a 'backup tax' on dyed fuel used on the road; under § 58.1-2265 the DMV can waive civil penalties for 'persons who first pay the backup tax.' DMV's page says the streamlined process to pay and get the waiver will be published 'on or before October 23, 2026.' Until then the authorization exists on paper and the procedure does not. Businesses are 'encouraged to maintain detailed fuel purchase records.' AAA Virginia diesel: $6.29.
South Carolina (announced October 20, through December 31): the State Transport Police have suspended dyed-diesel inspections on commercial vehicles. Size, weight, hazmat and traffic enforcement continue. This is an enforcement pause, not a tax order; nothing published says the state's fuel tax is waived. AAA South Carolina diesel: $5.83, versus $3.36 a year ago.
North Carolina (HB3, Relief at the Pump, signed October 9, in force October 10 through November 30; dyed diesel for farm use through December 31): the 41-cent-per-gallon motor fuel tax on both gasoline and diesel is zero for the period. Governor Josh Stein: 'I am signing this bill to keep more money in people's wallets, but this temporary relief is just one step.' One week in, the AAA state diesel average is down 12 cents and 65 cents below its level a month ago. Speaker Destin Hall has said an extension is possible.
Michigan joined the first wave late: Governor Whitmer's EO 2026-15 (October 12) allows dyed diesel on the road only for vehicles with farm or wood-harvester plates, through December 31. Montana, which on October 7 said dyed diesel 'remains' illegal on public roads, paused enforcement around October 10 for commercial agriculture and timber vehicles only. Pennsylvania still has no order and no tax holiday.
Still running from the first wave, per Transport Topics' tally: Ohio (HB 519, diesel tax from 47 cents to effectively zero, October 4 through January 2), Colorado and Missouri (all vehicles, through December 31), Kentucky (truckers and farmers), Nebraska (through December 23), Iowa (through February 2), Alabama (enforcement pause through January 22), Idaho and Maryland (through November 8; Maryland ag and forestry only), Arkansas (October 30), Louisiana (October 22), Indiana (farm and timber hauling, through November 4), Illinois (ag only, December 31), and Texas (no expiry, 20-cent state tax still owed). Georgia's gasoline and diesel tax holiday ends either October 29 or November 5 depending on which trade outlet you read; check the governor's office before planning fuel stops.
What the federal relief is, and is not
The federal piece is narrower than most of the headlines. On October 14 the IRS published IR-2026-122, responding to the President's October 5 executive order on 'Emergency Tax Relief on Diesel Fuel.' It says the agency 'will not impose a penalty when dyed diesel fuel is sold for use or used on highways nationwide,' retroactive to October 1 and running through December 31, and that sellers 'are under no obligation to investigate or document the ultimate end-use.' That is a penalty waiver, nationwide, regardless of what your state has done. The 24.4-cent federal excise tax itself was not waived. The release says the IRS 'anticipates that it will issue further guidance' on postponing payment of that tax under Section 7508A and 'will explore avenues to eliminate the obligation to pay any amounts deferred,' with Form 720 instructions to follow. As of October 21 that guidance has not appeared, so nobody can tell you the date the deferred tax comes due. And the IRS is explicit about the other layer: 'This relief only applies for federal tax purposes. It has no effect on state fuel taxes and penalties.'
The IFTA catch, in IFTA's own words
Carmen Martorana, executive director of the International Fuel Tax Association, told Land Line on October 16: 'So far, the states that have issued orders on dyed diesel have very limited use exemptions, and none have exempted the state excise taxes.' The mechanics for an interstate carrier: you still report the miles on your IFTA return for the jurisdiction where you bought the fuel, but because the dyed fuel carried no state tax at the pump, 'they cannot claim tax paid purchases, so they will have to pay the state taxes on the IFTA return.' In other words, the pump discount on dyed diesel is a loan from the state until your quarterly filing. Transport Topics adds the obvious border problem: a carrier 'may legally use dyed diesel in one state but face penalties after crossing into another.' NATSO's reading from the start was that the federal order 'is mainly a farm-hauling measure.' OOIDA's Todd Spencer: 'OOIDA believes allowing the wider use of red-dyed diesel will provide minimal relief.'
The price the orders are chasing
EIA's national on-highway diesel average for the week of October 19 was $6.276, up 9.7 cents after three straight weekly declines and $2.656 above a year ago; the record is $6.529, set September 22. The regional spread is the story of this article: Lower Atlantic $5.740 (the tax-holiday states pull it down), Central Atlantic $6.508, Midwest $6.352, Gulf Coast $5.903, Rocky Mountain $6.422, West Coast $7.394, California $8.242. AAA's national average on October 21 was $6.317, a cent under the day before and 74% above the $3.621 of a year ago. ATA chief economist Bob Costello, speaking at the association's conference in Charlotte on October 20, offered no comfort: 'I'm not saying you're going to see a big spike here, but I don't think there's gonna be much relief.' Distillate stocks are 'historically low for this time of year,' and the Strategic Petroleum Reserve is down to 282.9 million barrels, the lowest since October 1982. FreightWaves' John Kingston noted that ULSD futures jumped more than 21 cents on October 13 once traders concluded the short-term fixes, including the Russian diesel deal, 'were going to have limited to no impact,' and that the Bayway refinery in New Jersey is running through a Teamsters lockout.
The cost is already showing up as exits. The Associated Press, citing a FreightWaves tally, counts at least 16 trucking, delivery and transportation bankruptcies between late August and September 21, after more than 20 in a 30-day stretch in May before diesel set its record. Midwest Expedited, a 95-truck carrier, filed for Chapter 11 on October 6. OOIDA's Lewie Pugh put the arithmetic on the record: every dollar a gallon costs an independent about $400 a week, and 52% of registered carriers run one truck. University of Minnesota Morris economist Stephen Burks: 'This could be the straw that broke the camel's back.'
What to do with this
For owner-operators and small fleets running the East Coast
If your lanes are inside North Carolina, Ohio, Georgia or another tax-holiday state, buy there. A tax holiday is real money at the pump with no IFTA surprise on the miles in that state (Georgia asks you to report the holiday miles as non-IFTA miles). Dyed diesel is different: cheaper at the pump, taxed later on the return.
Before you fill a highway truck with dyed fuel in West Virginia, Virginia or South Carolina, know which of the three you are in. West Virginia has suspended penalties and inspections but says the tax remains. Virginia will waive the penalty only if you pay the backup tax through a DMV process that does not exist until October 23. South Carolina has only stopped looking.
Keep every dyed-fuel receipt separate, with gallons, date and state. Your IFTA preparer will need to strip them out of tax-paid purchases, and a state auditor in 2027 will ask for them.
Do not carry dyed fuel across a state line into a state without an order. The IRS waiver protects you from the federal penalty only; the state penalty where you get dipped is whatever that state says it is.
Watch for the IRS Form 720 guidance on the 24.4-cent deferral. Until it says otherwise, assume the federal tax on dyed fuel used on the road since October 1 is owed, with the due date to be announced.
Price the surcharge off the regional EIA number, not the national one. A load that starts in the Lower Atlantic at $5.74 and ends in the Central Atlantic at $6.51 is a 77-cent swing on every gallon you buy at the wrong end.
Two weeks ago the red-diesel map was a Plains-and-Gulf story with a few farm-only exceptions. It is now a national patchwork that reaches the Atlantic, with West Virginia the first eastern state to say the word 'trucking' out loud in its order. The pattern underneath has not changed. Governors can stop inspections and waive penalties by signature. The tax is set by statute, and only North Carolina and a handful of others have touched it. For a carrier whose truck lives in six states a week, the useful number is not the governor's $41 per fill. It is the line on the IFTA return where the discount comes back.
Fuel orders, tax holidays and the IFTA fine print, state by state
Qrylo tracks every dyed-diesel order and fuel-tax suspension so you know what the pump price really is before you plan the route.