Nebraska Governor Waives Diesel Tax for Agriculture Producers Amid Economic Pressures
In an effort to alleviate financial burdens on the agricultural sector, Nebraska Governor Jim Pillen has enacted an executive order to suspend the state diesel tax for the next 90 days. This decision aims to support agricultural producers facing record-high diesel prices, which currently average $6.21 per gallon in the state.
Governor Pillen’s executive order, signed last week, not only suspends the diesel tax but also temporarily lifts weight restrictions for trucks transporting agricultural goods, including grain, livestock, dairy, and fertilizer. Addressing questions at the 2026 Governor’s Summit in Kearney, Pillen humorously suggested truck drivers signal by honking three times at weight scales, referencing Nebraska’s rallying cry, “Go Big Red.”
However, Capt. Mike Maytum of the Nebraska State Patrol emphasized the importance of stopping at scales. “Officers operating our scales are very, very cognizant of what’s covered in these emergency orders. We’ll honor all of those weights,” Maytum assured, while clarifying that this order applies specifically to local roads and state highways, excluding federally regulated interstates.
Neighboring states such as South Dakota and Iowa are reportedly considering similar tax suspensions. If enacted, Nebraskans could benefit by applying for tax refunds when traveling through these states, provided they retain their receipts. Additionally, the state is lobbying the federal government to waive the federal diesel tax and halt diesel exports to enhance domestic supply.
Michael Walsh from the Nebraska Department of Revenue advised producers to claim the tax exemption on their annual tax forms, though the fiscal impact on state revenue remains uncertain. State Sen. Robert Clements noted that any lost revenue would affect a specific cash fund rather than exacerbating Nebraska’s budget deficit, which stands at $208 million this year with a projected $840 million deficit over the next biennium.
The executive order is part of a broader strategy to mitigate economic pressures in the agriculture sector, as outlined by Governor Pillen in his recent announcement.
