By Scout Nelson
South Dakota is adjusting its enforcement priorities for dyed diesel fuel as high fuel prices continue to create challenges for farmers, truckers, and consumers. Governor Larry Rhoden has directed the South Dakota Department of Public Safety (DPS) to temporarily change how it handles dyed diesel enforcement.
The action is intended to provide financial relief while keeping public safety as a major priority. Dyed diesel is generally used for purposes that qualify for tax exemptions, such as farm machinery. It is not normally intended for use on public roads by vehicles that are required to pay fuel taxes.
“When diesel prices are high, agriculture suffers, transportation costs increase, and consumers pay more for all goods and services,” wrote Governor Larry Rhoden. “l am directing the Department of Public Safety to adjust enforcement priorities regarding the use of dyed diesel fuel. By taking this action, we will provide meaningful relief to South Dakota farmers...[and] allow all taxpayers to realize meaningful savings from using dyed diesel.”
The state action follows a recent federal decision by President Trump concerning dyed diesel enforcement. The federal Executive Order temporarily suspends enforcement of federal penalties for using dyed diesel fuel on highways and public roads.
While that federal order remains in effect, South Dakota DPS will focus on commercial motor vehicle inspections on issues that may create a threat to public safety. Officials will not make the identification of dyed diesel fuel the main focus of these inspections.
Governor Rhoden communicated the direction to DPS Secretary Robert Perry. The governor's office also made the related letter available to the public.
However, South Dakota has limits on what the governor can do on his own. Some states give governors broader authority to suspend state laws during emergencies. South Dakota allows the governor to suspend administrative rules, but state fuel taxes are established through law.
This means the governor cannot simply remove all state penalties or taxes connected to dyed diesel used for purposes that are not normally tax exempt.
“Because taxes on diesel fuel are set in statute in South Dakota, I cannot unilaterally waive penalties on dyed diesel used for non-tax-exempt purposes. I can only direct DPS to not take enforcement action,” continued Governor Larry Rhoden. “Legislation may be necessary to retroactively waive state taxes owed on these products to comply with the President’s order. Pending legislative approval, this waiver will cover a period from today until the end of calendar year 2026.”
The governor is also considering additional steps to provide support. Possible legislation could address state taxes connected to dyed diesel and provide a wider form of relief. Any such tax waiver would require approval from lawmakers.
Before the federal action was announced, Governor Rhoden had already asked the South Dakota Department of Revenue to seek penalty relief from the U.S. Internal Revenue Service. The request focused on expanding the allowed uses of dyed diesel during a period of high fuel costs.
The governor has also taken other steps to help farmers manage transportation and fuel challenges. Last week, he signed Executive Order 2026-11, which provides additional flexibility for agricultural operations.
The order allows farmers to haul crops, livestock, and other agricultural commodities at up to 10% above existing weight restrictions. This can help farmers reduce the number of trips needed to transport agricultural goods.
The order also suspends a $25 overweight trip permit. This removes an additional cost for eligible agricultural transportation during the period covered by the order.
Another part of the order addresses possible future fuel shortages. The South Dakota Department of Revenue will monitor fuel supplies and determine whether a tax refund to fuel suppliers is needed if regular diesel must be used in farm machinery because dyed diesel becomes unavailable.
Together, these actions show South Dakota's effort to provide farmers with greater flexibility while diesel prices remain a concern. The state is balancing financial relief with public safety and existing tax laws.
The temporary enforcement change also demonstrates the importance of coordination between state and federal officials. As federal and state actions continue, additional legislation or policy changes may determine how long the relief remains available and how state fuel taxes are handled.
Photo Credit: gettyimages-fotokostic
Categories: South Dakota, Energy, Government & Policy