Agricultural Diesel Fuel Supply, Executive Order No. 26-21 Information

Motor Fuels Tax Relief for Transportation of Agricultural Products

Who:

Taxpayers who transport Nebraska sourced commercial agricultural products on Nebraska’s highways and public roads, including interstate miles in Nebraska.

Agricultural products means the transportation of livestock, grain or other seasonally harvested products from the field where the products are harvested to storage, market, or stockpile and return trips.

In order to qualify for tax relief, the licensed vehicle must be used for transporting Nebraska agricultural products. The relief does apply to personal vehicles provided the vehicle is used to haul Nebraska agricultural product. Personal use miles do not qualify for the refund.

What:

Motor Fuels Tax Relief for diesel used in the transportation of Nebraska agricultural products and the dyed diesel penalty relief. Tax relief will be in the form of a refund of the Nebraska motor fuel tax paid on undyed diesel. It also includes a refund of the tax of $0.0025 per gallon paid on dyed diesel purchased beginning on October 1, 2026, as part of LB815.

The dyed diesel penalty relief only applies to the Nebraska penalties and not federal penalties. The Tax Commissioner has sent a request to the Internal Revenue Service requesting the same dyed diesel fuel penalty relief at the federal level.

When:

Executive Order No. 26-21 is effective beginning September 24, 2026, and ending December 23, 2026. Qualified diesel used during this 90-day time period is eligible for a motor fuel tax refund.

How:

Qualified taxpayers involved in the transportation of Nebraska agricultural products may file a Nebraska Ag Use Motor Fuels Tax Refund Claim, Form 84AG with the Nebraska Department of Revenue to claim the motor fuels tax refund.

Taxpayers must write EO 26-21 on the top of the submitted Form 84AG. Taxpayers may cross out Gasoline in the Refund Calculation section and write in Dyed Diesel for the dyed diesel refund. Taxpayers must provide supporting documentation to substantiate the tax paid on fuel used and to document the transportation of Nebraska agricultural products.

International Fuel Tax Agreement (IFTA) taxpayers - Taxpayers who are registered under the IFTA program that transport Nebraska sourced agricultural products within Nebraska using tax-paid undyed diesel may report qualified Nebraska miles as nontaxable miles for the claimed period on their IFTA return to obtain a credit for the associated Nebraska miles. Contact the Nebraska Department of Motor Vehicles, Motor Carrier Division at 402-471-4436 for additional information.