Gov. Stein Directs N.C. Revenue Department to Waive State Penalties on Highway Use of Dyed Diesel Through Dec. 31, 2026
The Sept. 30 directive lets farmers use their untaxed off-road diesel in highway vehicles during harvest without state penalties. Federal penalties still apply unless the IRS grants its own relief, which Stein has asked for.
Two Governors, Two Different Fuels
Alabama's Kay Ivey suspended enforcement. Louisiana's Jeff Landry declared an emergency. North Carolina's Josh Stein issued a directive[1][17][18]. All three are aiming at the same problem — a farmer whose diesel tank holds fuel he's not legally allowed to burn on the road. The language differs by state, but the mechanism underneath is identical, and so is the gap each one leaves open.
On Sept. 30, 2026, Stein told North Carolina's revenue secretary, McKinley Wooten, to stop enforcing state penalties against farmers who use red-dyed diesel in highway vehicles. The relief runs through the end of the year[1][2]. It's not a new law and not a numbered executive order — coverage consistently describes it as a directive, an instruction from the governor to the agency that enforces the rule[1][2][3].
That dye is the whole story in miniature. Diesel sold for off-road machines — tractors, combines, irrigation pumps — doesn't carry the tax that pays for highways, because those machines never touch a highway. Red dye gets added so an inspector can spot it if someone tries to run it through a truck on a public road. Using dyed fuel on the road is normally illegal at both the state and federal level, because that truck is using roads it never paid tax toward[2][3].
What a Directive Can and Can't Touch
Stein's order only reaches half the problem. The dyed-fuel rule exists in two separate rulebooks, one state and one federal, and a governor can only touch his own[1][7]. So even as North Carolina farmers get a pass on state penalties, the IRS penalty for the same act is still sitting there, untouched, waiting on a federal decision Stein can request but not make[1][3].
That's why Stein also wrote to the IRS, asking it to grant matching relief[1][3]. As of the directive, the agency hadn't acted. The IRS has waived this penalty before — after Hurricane Florence in 2018, after Hurricane Helene in 2024 — but historically only for physical supply disruptions, not for high prices alone[7][8][9]. A storm knocks out a pipeline; that's a disruption. A price spike from a war overseas is a different kind of problem, and it's not clear the IRS treats it the same way.
Why does that boundary matter at all? Highway fuel taxes are what pay for road construction and repair. Every gallon of untaxed dyed diesel burned on a highway is road use with no road tax behind it. State revenue officials have historically kept these waivers short and tied to emergencies, precisely so the line between taxed and untaxed fuel doesn't blur into meaninglessness[9]. That's the case for caution — and it's also why a farmer can't assume a state waiver means the problem is fully solved.
$6.25 a Gallon, With the Combine Already Running
The governor's office says diesel in North Carolina hit as high as $6.25 a gallon in September, on top of tariffs, drought, and crop losses farmers are already absorbing[1][2]. Nationally, diesel broke $6 a gallon for the first time in mid-September, according to the U.S. Energy Information Administration[10][13]. Prices climbed after the U.S. and Israel struck Iran in February 2026 and the Strait of Hormuz was blocked, disrupting a global oil corridor far from any North Carolina field[10][11].
The timing is what makes this urgent rather than theoretical. Harvest is the most fuel-hungry stretch of the farming year, and crops don't wait for prices to come down — they have to come out of the ground when they're ready[2][10]. The N.C. Farm Bureau says diesel costs have been the top concern it's heard from farmers all year, and its president, Shawn Harding, called Stein's move "timely and meaningful relief" that came less than a day after farm groups sent the governor a letter asking for help[2][4].
What the directive actually does for a farmer's bottom line depends on something the release doesn't quantify: how much dyed diesel that farmer already has sitting in a tank. Tennessee lawmakers, weighing a similar step, put the potential savings at around 50 cents a gallon. North Carolina hasn't published a comparable figure[1][16].
A Governor's Race Logic That Crosses Party Lines
Stein is a Democrat acting ahead of November's midterms, and the Associated Press counts roughly a third of states offering some version of fuel-tax relief right now, many of them in just the past week[14]. But this isn't a partisan pattern. Ivey in Alabama, Landry in Louisiana, and Indiana's Mike Braun — all Republicans — took comparable dyed-diesel steps in September[17][18][19]. Any governor facing voters soon has an incentive to show fast, visible relief on a cost voters feel directly, and a directive like this one requires no vote in a legislature that might not cooperate. North Carolina's General Assembly is run by Republicans, and Stein's move needed none of their approval[1][14].
Fox Business covered the broader price spike through a warning to the party that controls Washington, noting Republicans "could feel same fate" as Democrats did over gas prices in a prior cycle — a framing about electoral exposure, not about relief policy[15]. Fortune took a different angle, leading with a Trump-voting Missouri farmer paying twice what he used to for the fuel that runs his equipment, and describing diesel as 60% higher than it was before the Iran war[12]. Al Jazeera covered the same price record on Sept. 4 but traced it to the war and the Hormuz closure rather than to any domestic relief effort, and reported no coverage of North Carolina's directive specifically[11].
What Local Coverage Left Out
North Carolina outlets — WCTI, WWAY, the Johnston County Report, Iredell Free News, Wake Weekly — tracked the governor's release closely, in some cases echoing its language almost word for word, including the Farm Bureau's praise[2][3][4][5][6]. What several of them didn't say clearly is that this is enforcement relief, not a change in the underlying law, and that federal penalties haven't gone anywhere. The Johnston County Report's headline, "Farmers Can Now Use Dyed Diesel On Highways Without State Penalties," reads to a casual reader like blanket permission. The word "State" is the only signal that an IRS penalty could still apply[4].
That gap is where the story sits unresolved. North Carolina's relief ends Dec. 31, 2026, regardless of what the IRS decides[1]. Whether the agency grants the federal waiver Stein has asked for — and whether other states get the same answer — is still an open question, one that will matter more to farmers' finances than the state-level move everyone's been covering so far[1][3][7].
Summary
On Sept. 30, 2026, North Carolina Gov. Josh Stein (D) told state Revenue Secretary McKinley Wooten to stop enforcing state penalties when farmers use red-dyed diesel in highway vehicles. The relief runs through the end of 2026[1][2]. Dyed diesel is fuel sold without highway taxes. It is meant for tractors, combines and other off-road machines. Using it in a road vehicle is normally illegal under both state and federal law. Stein also wrote to the IRS asking for matching federal relief[1][3]. As of the announcement, the IRS had not acted. So a farmer who uses dyed fuel on the road could still face a federal penalty[1][7].
The governor's office said diesel hit record highs in September, as high as $6.25 a gallon in North Carolina. It said farmers were also dealing with 'tariffs, drought conditions, crop loss'[1][2]. N.C. Farm Bureau President Shawn Harding called the move 'timely and meaningful relief.' He noted it came less than a day after farm groups sent the governor a letter asking for help[2][4]. Nationally, diesel topped $6 a gallon for the first time in mid-September, according to federal data. Prices rose after the U.S. and Israel attacked Iran in February and the Strait of Hormuz was blocked[10][11].
North Carolina is one of many states acting. The Associated Press counts about one-third of states offering some kind of fuel-tax relief, many in the past week. Governors of both parties have done so ahead of the November midterms[14]. Several Republican governors took similar dyed-diesel steps in September, including those of Alabama, Louisiana and Indiana[17][18][19].
The main open questions are about reach, not about the facts. One is whether relief limited to fuel farmers already have on hand will make a real difference in their costs. Another is whether the IRS will waive federal penalties too, as it has after past hurricanes[7][8]. Coverage did not report any organized opposition to the directive.
The Event
On Sept. 30, 2026, Gov. Josh Stein directed N.C. Revenue Secretary McKinley Wooten to provide relief from state penalties for using red-dyed diesel in highway vehicles through the end of 2026[1][2]. Stein also wrote to the Internal Revenue Service asking for federal penalty relief for the same fuel[1][3]. The N.C. Farm Bureau said the action came less than a day after it and other farm groups sent the governor a letter asking for help[2][4].
Undisputed Facts
- Stein's Sept. 30, 2026 action was a directive to the N.C. Department of Revenue to provide penalty relief through the end of 2026. Coverage describes it as a direction to the Revenue secretary, not as a numbered executive order[1][2][3].
- Red-dyed diesel is sold without highway fuel taxes for off-road use. The dye marks it so inspectors can spot it in road vehicles[2][3].
- The state action does not cover federal penalties. Stein asked the IRS separately for federal relief[1][3].
- The IRS has waived dyed-diesel penalties in North Carolina before. Examples include Hurricane Florence in 2018 and Hurricane Helene in 2024, when relief ran from Sept. 26 to Oct. 15, 2024[7][8][9].
- The governor's office says N.C. diesel reached as high as $6.25 a gallon in September 2026[1][2].
- National diesel prices topped $6 a gallon for the first time in mid-September 2026, according to the U.S. Energy Information Administration[10][13].
- About one-third of states have offered some form of fuel-tax relief in 2026. Some limited it to farmers, loggers and others who use dyed diesel[14].
The Pressure
Strip away the moralizing and blame. What structural realities persist regardless of which narrative wins?
- Harvest timing
- Crops must be harvested when ready. Fall is the most fuel-intensive period of the farm year, so fuel prices hit hardest now[2][10].
- Two-layer penalty system
- Dyed-fuel rules exist at both the state and federal level. A governor can only waive the state layer. Full relief needs the IRS, which has typically acted only for supply disruptions such as hurricanes[1][7][8].
- Midterm affordability politics
- Governors of both parties are rushing out fuel relief before the November elections, with affordability a top voter concern[14][15].
- Road-fund integrity
- Highway fuel taxes fund roads. Untaxed fuel on highways weakens that link, so waivers are usually kept short[9].
Material realityDiesel prices rose after the U.S. and Israel attacked Iran in February 2026 and the Strait of Hormuz was blocked. They passed $6 a gallon nationally in mid-September[10][11][13]. North Carolina's directive changes no fuel price. It only lets farmers who already hold untaxed dyed diesel burn it in trucks without state penalties until Dec. 31[1][2]. Federal penalty exposure remains unless the IRS acts[1][7]. The size of the savings depends on each farm's stored fuel and on the state tax rate. No statewide estimate was published[1].
Narrative as a weaponThe governor's office is the main source. Its release headline uses the broad phrase 'Halting the Prohibition' and says it lowers costs for 'Farmers and North Carolina Families.' The text itself describes a narrower step: state penalty relief[1]. Local outlets largely repeat that framing[2][3][4][5][6]. The N.C. Farm Bureau wants credit for prompting the action and wants pressure on the IRS for the federal half[2]. National and foreign outlets mostly skip North Carolina. They use the wider fuel-price story either as a midterm risk for the president's party or as a cost of the Iran war[11][12][14][15]. Readers should note one point in particular: the step is enforcement relief at the state level only, not a change in law, and it is not yet matched federally.
How Each Side Sees It
Each major actor’s view — how it frames things, its underlying incentive, and how it’s materially affected. Tap a side to read it.
Frames it asHarvest is the most fuel-hungry stretch of the farm year. Many farmers already have untaxed dyed diesel stored on the farm. Letting them burn that fuel in their trucks lowers their costs right away, without new spending or new laws[1][2]. The administration says farmers are being squeezed from several sides at once: tariffs, drought, crop loss and record fuel prices. In its view, a quick, temporary step that ends Dec. 31 is a measured response[1]. The release title also presents it as lowering costs for 'North Carolina Families,' since farm costs feed into food prices[1].
WhyTo show quick, visible action on affordability during a midterm year without a fight in the legislature. North Carolina's General Assembly is led by Republicans[1][14].
Impact on themPolitical credit with a rural, largely conservative group of voters. It costs some state fuel-tax revenue, but no estimate was released[1].
Frames it asDiesel is the top cost farmers worry about right now. Harding said diesel expenses have been 'the number-one concern I've heard from farmers in what has already been a challenging year'[2][4]. Farmers cannot delay harvest until prices fall. Crops have to come in when they are ready. Farm groups also want federal relief, because a state waiver alone still leaves farmers exposed to IRS penalties[1][7].
WhyTo lower fuel costs during harvest and keep federal and state officials focused on farm costs[2][10].
Impact on themFarmers with stored dyed diesel can use it in road vehicles without state penalties. Without IRS action, federal penalties remain a risk[1][7]. In Tennessee, lawmakers put the per-gallon savings from a similar step at around 50 cents. North Carolina's figure was not published[16].
Frames it asFederal law treats the dye as a sign that federal excise tax was not paid. The IRS has generally waived the penalty only for supply disruptions, such as hurricanes or the 2021 Colonial Pipeline attack. It has not done so for high prices alone[7][8][9].
WhyTo protect federal highway-tax revenue and keep the dyed-fuel system meaningful, while responding to requests from many states at once[7][14].
Impact on themThe IRS decides whether North Carolina's relief is complete or partial. As of Oct. 1, no federal waiver had been reported[1][3].
Frames it asHighway fuel taxes pay for road building and repair. Dyed fuel is untaxed because off-road machines do not wear down public roads. Every gallon of dyed fuel burned on a highway means road use with no road tax paid. N.C. revenue officials have treated past waivers as emergency steps tied to supply disruptions[9].
WhyTo keep any waiver short and limited so the line between taxed and untaxed fuel holds[9].
Impact on themSome lost state fuel-tax revenue through Dec. 31. No public estimate was found[1].
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The Bias Ledger average rating 3.1
The same story, as framed by outlets across the spectrum, ordered least to most biased. The bias score (1 = straight, 10 = heavily spun) is an AI assessment of that framing — click an outlet to see its track record. The tell is the word choice or omission that reveals the angle.
| Outlet | Vantage | Bias | How they frame it | The tell |
|---|---|---|---|---|
| WCTI | U.S. local (Sinclair-owned ABC affiliate, eastern N.C.) | 2 | Stein directs state penalty relief for farmers' use of dyed diesel during harvest | Uses the accurate verb 'directs' and the word 'state' penalty relief. It mostly reproduces the release and the Farm Bureau quote, with little independent context. |
| WWAY | U.S. local (Wilmington broadcaster) | 2 | Stein directs temporary penalty relief for on-road use of dyed diesel fuel | 'Temporary' and 'penalty relief' accurately describe what the action is. It does not stress that federal penalties remain. |
| Johnston County Report | U.S. local (independent county news site) | 3 | Johnston County Farmers Can Now Use Dyed Diesel On Highways Without State Penalties | 'Can now' reads as a permission. The word 'State' is the only signal that federal exposure remains. |
| Associated Press | U.S. center (wire service) | 3 | High gas prices are spurring states to waive taxes and regulations amid midterm election | Places all state relief inside an election-year motive. The lens is well supported, but it applies to both parties' governors. |
| Al Jazeera | Qatari state-funded | 3 | Diesel price hits all-time high in US amid Iran war woes | Ties U.S. fuel costs directly to the U.S.-Israeli war on Iran, a framing that puts the cause in U.S. policy. |
| Fox Business | U.S. right | 4 | Republicans could feel 'same fate' as Democrats as gas prices are elevated ahead of midterms, expert says | Frames fuel prices mainly as an electoral risk, with a comparison to Democrats' 2022 experience. It is not about relief policy. |
| Fortune | U.S. center-left business | 5 | U.S. diesel prices are now 60% higher than they were before the Iran war, with one Trump voter paying twice as much to fuel his farm equipment | Picks out a 'Trump voter' as the face of the cost. That turns a price story into a political-irony story. |
References
- Governor Stein Takes Action to Lower Costs for Farmers and North Carolina Families by Halting the Prohibition of Dyed Diesel Fuel on Highways — Office of the Governor of North Carolina · Official government press release from the Democratic governor's office; advocates for its own action
- Stein directs state penalty relief for farmers' use of dyed diesel during harvest — WCTI · Local ABC affiliate owned by Sinclair Broadcast Group (corporate leans right; local news mostly straight)
- Stein directs temporary penalty relief for on-road use of dyed diesel fuel — WWAY · Local commercial broadcaster, Wilmington, N.C.
- Johnston County Farmers Can Now Use Dyed Diesel On Highways Without State Penalties — Johnston County Report · Independent local news site
- Gov. Stein takes action to lower diesel fuel costs for N.C. farmers — Iredell Free News · Independent local news site; often republishes official releases
- Stein takes action to halt prohibition of dyed diesel fuel on highways — Wake Weekly · Local community newspaper
- IRS granting dyed diesel penalty relief as a result of Hurricane Helene — Internal Revenue Service · U.S. federal tax agency (primary source)
- IRS announces waiver of dyed fuel penalty in North Carolina due to Hurricane Florence — Internal Revenue Service · U.S. federal tax agency (primary source)
- Notice Regarding NCDOR Waives Dyed Diesel Fuel Penalty Due to Colonial Pipeline Cyber-Attack and Fuel Supply Chain Disruptions — N.C. Department of Revenue · State tax agency (primary source)
- Diesel has never been more expensive. That's squeezing farmers as harvest begins — Harvest Public Media (via WXPR) · Public-media agricultural reporting collaborative (center/center-left public broadcasting)
- Diesel price hits all-time high in US amid Iran war woes — Al Jazeera · Funded by the government of Qatar
- U.S. diesel prices are now 60% higher than they were before the Iran war, with one Trump voter paying twice as much to fuel his farm equipment — Fortune · U.S. business magazine, center to center-left
- U.S. diesel price tops $6 per gallon, a record high as Ukraine and Iran wars ripple through economy — CNBC · U.S. business news, center (owned by Versant)
- High gas prices are spurring states to waive taxes and regulations amid midterm election — Associated Press · Nonprofit cooperative wire service, center
- Republicans could feel 'same fate' as Democrats as gas prices are elevated ahead of midterms, expert says — Fox Business · U.S. right (Fox Corporation)
- Tennessee lawmakers seek relief for farmers, loggers amid record-high diesel prices — Tennessee Lookout · Nonprofit, part of States Newsroom (progressive-funded network)
- Governor Ivey suspends enforcement on dyed diesel fuel to help farmers — WAFF · Local broadcaster, Huntsville, Ala. (Gray Media)
- Landry declares emergency to help farmers, loggers cope with record diesel prices — WAFB · Local broadcaster, Baton Rouge, La. (Gray Media)
- Braun renews gas tax suspension, broadens untaxed diesel use for farmers — Daily Journal (Franklin, Ind.) · Local daily newspaper