Hobbs Allows Expanded Use of Tax-Free Diesel for Agricultural Vehicles
Howard Fischer, Capitol Media Services
October 14, 2026
Key Points:
- Gov. Katie Hobbs has temporarily lifted restrictions on agricultural vehicles using tax-free diesel with red dye.
- Red dye diesel is typically used on farmlands and is exempt from certain taxes.
- The governor's office assures that farmers will not be required to repay taxes when the law reverts in 2027.
- Hobbs aims to reduce costs for Arizonans by cutting taxes and regulations for farmers and ranchers.
- High diesel fuel prices, reaching nearly $6 a gallon, significantly impact food and fiber producers, leading to higher consumer costs.
- Farmers and ranchers can now use red-dye fuel for off-road equipment, including combines, trucks, and generators.
Text:
In response to rising diesel fuel costs, Governor Katie Hobbs has issued an executive order, allowing agricultural vehicles to temporarily utilize "red dye" diesel off the farm. This move aims to provide financial relief to Arizona's farmers and ranchers, who are facing significant expenses due to the war in Iran.
Red dye diesel, usually reserved for off-road use, is virtually identical to regular diesel fuel but is exempt from certain taxes. Farmers and ranchers can now use this fuel in their trucks for delivering agricultural products, with the governor's office assuring that there will be no repayment of taxes when the law returns to its original state in 2027.
According to John Boelts, president of the Arizona Farm Bureau, the high fuel prices are pushing up costs for food and fiber producers, which, in turn, affects consumers. This executive order is one step towards lowering those costs.