Business and Financial

Since President Trump signed the “Emergency Tax Relief on Diesel Fuel” Executive Order on October 5, 2026, there’s been a great deal of discussion and confusion about what the order says and how it will play out. To help clear up these misunderstandings, we’ve taken a close look at the plain language of the order itself.  Here’s a step-by-step walkthrough of what the order says and its timeline and guidance for implementation, along with thoughts on what we can expect next.

1. Purpose.  The order states that the farming and trucking industries have been “particularly hard hit” by rising diesel prices.  For that reason, the purpose of the order is to provide temporary relief to ensure fuel affordability for farmers, truckers, and workers.

2. Deferral of fuel tax payments and no penalties or interest for deferred tax payments.

• a) Necessity of the deferral.  Under federal law in 26 U.S. Code 7508A, the Secretary may postpone a tax deadline by up to one year when there is a “federally declared disaster, a significant fire, or a terroristic or military action. The order requires the Secretary of the Treasury, by October 10, 2026, and in consultation with the Secretary of Defense, to determine whether there are grounds for postponing a tax related deadline under the federal law.  Specifically, the Secretary must determine whether one of the necessary events has occurred and must identify the taxpayers affected by the event.
• b) Deferral of taxes and penalties.  Authorizes the Secretary to defer payments and penalties for diesel taxes.  If the Secretary determines there are grounds for postponement of the tax, the Secretary must defer payments of the federal diesel taxes established in 26 U.S.C. 4041(a)(1)(A) and 26 U.S.C. 4041(b)(1)(B) from October 5 to December 31, 2026.  No taxes deferred during this period are to be subject to penalties, interest, or other amounts in addition to the tax.
• c) No penalties for dyed fuel use.  By October 10, the Secretary must direct the IRS to announce that it will not assess penalties “when dyed diesel fuel is sold or used on the highway” from October 5 to December 31, 2026, and that the agency will “address relief from penalties for failure to make the semimonthly deposits of that tax.”

3. Implementation of the order.  The Secretary of the Treasury must establish guidance for implementing the order.  There is no deadline for completion of the guidance, but the order requires that the guidance shall identify:

• The specific relief being granted and any conditions for the relief;
• The legal basis for relief, covered taxpayers, persons, locations, acts, liabilities, and deadlines;
• The beginning and ending dates of each applicable period;
• The date by which the postponed taxes must be paid.

4. Tax forgiveness.  The Secretary must “explore avenues, including legislation” that would eliminate the obligation to pay the deferred tax amounts. As with the guidance directive, there is no timeline for when the Secretary must do so.

5. Prioritizing fuel compliance resources.  The Secretary must publicly announce his determination on how the IRS should allocate its resources for inspecting vehicle fuel tanks and fuel sampling during the deferral period.

6. Maintaining highway safety and efficiency. The Transportation Secretary must engage with states and other relevant organizations to safely and expediently coordinate the policies in the order.

7. Promoting diesel access for farmers.  The Secretary of Agriculture must further the priorities of the order by coordinating with agricultural cooperatives, rural fuel distributors, farm supply organizations and others to:

• Ensure the adequate distribution of dyed diesel for use in high-demand areas;
• Encourage states to take actions to further the policies of the order.

8. Engaging state governments.  The White House Office of Intergovernmental Affairs must work with the states to adopt policies that correspond with the tax deferral.

What’s next?  

• October 10 should bring the first round of implementation of the order.  That’s when we can expect Treasury Secretary Scott Bessent to declare the necessity of the tax deferral.  That declaration then authorizes the Secretary to announce the deferral of the diesel fuel taxes and removal of tax payment penalties. The deferral period will be from October 5 to December 31, 2026.  October 10 is also the date by which Secretary Bessent must direct the IRS not to assess penalties for the sale or use of dyed diesel fuel on highways.
• The implementation timeline is less clear after October 10.  While the Secretary must develop guidance that includes the date for paying the postponed taxes, there is no deadline for when that guidance must be complete.
• Also unclear is whether the administration will seek complete elimination of the deferred tax payments.  The order only requires the Secretary to “explore” alternatives for diesel fuel tax elimination, and there is no timeline for the exploration. Only Congress has the power to eliminate or adjust the federal fuel taxes, but that has never happened since Congress set up the Highway Trust Fund in 1956 to create a dedicated source of funding for roadways.
• Remaining directives should play out along the way.  We can expect different timelines for implementation of the mandates on how to allocate resources towards fuel tank inspections and fuel sampling, maintaining highway safety and efficiency, promoting fuel access for farmers, and engaging with states to adopt similar policies.  Some state policy coordination discussions have already begun and some states, like Ohio, have already acted to temporarily suspend fuel taxes. 

Watch for continued updates on fuel taxes and other legal issues affecting agriculture on the Ohio Ag Law Blog.  Access the Executive Order “Emergency Tax Relief on Diesel Fuel” at https://www.whitehouse.gov/presidential-actions/2026/10/emergency-tax-relief-on-diesel-fuel/.

As anticipated, Ohio legislators have introduced legislation to create a ninety-day motor fuel tax holiday in Ohio. Both the House and the Senate initiated companion proposals on Monday, September 28 in the Ohio General Assembly.  Senate sponsors Jane Timken, R-Canton and Michele Reynolds, R-Canal Winchester and House sponsors Andrea White, R-Kettering and Jim Thomas, R-Plain Township expect their chambers to act on the emergency measures this week.

The proposals would nearly remove the diesel fuel tax of 47 cents per gallon and the gasoline tax of 38.5 cents per gallon. Both taxes would drop to a minimal tax of one-hundredth of one cent per gallon, which sponsors say is necessary for accounting purposes. Sponsors state that the reduction will save Ohioans three-quarters of a billion dollars in gas taxes.   Predictions are that the average gasoline consumer will see a savings of about $80 over the tax holiday, but agriculture will have higher savings due to the timing of the reductions during harvest season.

The legislation plans to pay for the tax reductions, which they expect to cost $726 million, from the state's General Revenue Fund (GRF).  The GRF ended fiscal year 2026 with a $1.2 billion surplus and the Office of Budget and Management expects a fiscal year 2027 balance of $745 million. For that reason, legislators chose to tap into the GRF rather than special revenue or Ohio Department of Transportation funds, although the legislation does not include any directives to restore the GRF allocation.

The proposals are not without support and controversy. Supporters approve of the tax relief for its positive effect on consumers, but condition their support on belief that the measures won't affect transportation needs that would have been funded by the repealed taxes. Critics claim there will be negative effects on transportation needs because gas tax revenues are already projected to be about $1.5 billion less than transportation project needs by 2050. Opponents also state that the proposals do not provide meaningful long-term relief and are rushed and politically motivated due to the upcoming election. Democrats are hinting at potential amendments they will offer, including a proposal to draw $600 million of the tax cost from Ohio's unclaimed funds.

A Senate hearing before the Government Oversight Committee will occur today, September 29, and the House will hold a hearing before the House Finance Committee tomorrow, September 30. Because the bills are emergency measures that would take effect immediately, they require a two-thirds approval by each chamber.  If the proposals do pass both chambers, all eyes will be on Governor DeWine, who has expressed concern about the effect of the lost revenues on state transportation projects.

Read H.B. 1019 and S.B. 475 and view the committee hearings on the proposals on The Ohio Channel.

For many small business owners, the federal government’s beneficial ownership information (BOI) reporting requirement has been a source of confusion, frustration, and uncertainty since the Corporate Transparency Act took effect. That uncertainty has now largely come to an end.

On August 11, 2026, the Financial Crimes Enforcement Network (FinCEN) issued a final rule that permanently exempts U.S. companies and U.S. persons from the federal BOI reporting requirements under the Corporate Transparency Act. The rule makes permanent the changes FinCEN first adopted on an interim basis in March 2025.  For most small businesses formed in the United States, including many farm LLCs and other closely held businesses, the practical result is that there is no longer a federal requirement to file a BOI report with FinCEN.

What Is BOI Reporting?

The Corporate Transparency Act created a new federal reporting requirement beginning in 2024. The law generally required corporations, limited liability companies, and similar entities to report information about the individuals who owned or controlled the entity to FinCEN.

The information was referred to as "beneficial ownership information," or BOI. A beneficial owner generally meant an individual who either exercised substantial control over the company or owned or controlled at least 25 percent of its ownership interests.  The purpose of the reporting requirement was to create a federal database that could be used to help combat money laundering, terrorism financing, and other illicit financial activity.

The original rules applied to a large number of ordinary U.S. businesses. As a result, small businesses, including many family farm entities, were required to determine whether they had to file, identify their beneficial owners, and comply with continuing reporting requirements when ownership or control information changed.

U.S. Companies Are No Longer Required to File

Under FinCEN's final rule, entities created under the laws of the United States are exempt from the BOI reporting requirements.  This means that a typical Ohio limited liability company, corporation, or other entity created by filing with the Ohio Secretary of State is no longer required to file a BOI report with FinCEN simply because it is a domestic business.  The exemption applies regardless of whether the business is large or small and regardless of whether the business is owned by one person or multiple family members.

What Happened to Previously Filed Reports?

The change also affects BOI reports that U.S. businesses and U.S. individuals have already submitted.

FinCEN announced that it intends to delete information about individuals that it reasonably believes was provided by a U.S. person. Consequently, a business that previously filed a BOI report does not need to file an updated report merely because ownership, management, or other information has changed. Domestic U.S. companies are now exempt from the reporting requirement.

Foreign Companies Are Not Exempt

The end of BOI reporting for U.S. companies does not mean that FinCEN has eliminated beneficial ownership reporting altogether.  The final rule continues to require certain foreign entities to report.  Under the revised definition, a "reporting company" is generally an entity formed under the law of a foreign country that has registered to do business in a U.S. state by filing a document with a secretary of state or similar office.

Even these foreign reporting companies receive significant relief under the new rule. They generally do not have to report the beneficial ownership information of U.S. persons. Instead, the reporting requirements focus on the foreign entity and its foreign beneficial owners.  Businesses with foreign ownership or foreign organizational structures should therefore carefully review the new rules rather than assuming that BOI reporting has disappeared in every circumstance.

What Does This Mean for Farm Businesses?

The new rule should simplify entity administration for many farm families.  Farm businesses frequently use LLCs, corporations, and other entities to operate their farm business and hold assets such as farmland, equipment, and livestock. Under the original BOI rules, each entity potentially required an analysis of its reporting status, beneficial owners, company applicants, and continuing reporting obligations.  Those federal BOI compliance concerns can now largely be largely ignored by U.S.-formed farm entities.

This does not, however, eliminate the importance of keeping accurate ownership records. Operating agreements, corporate records, stock ledgers, membership records, estate planning documents, and other business records should still accurately reflect who owns and controls the business. The elimination of federal BOI reporting is a reduction in federal reporting, not a reason to stop maintaining good business records.

Farmers who operate through an LLC, S corporation, or certain other business entities are affected by significant changes in USDA payment eligibility rules. Beginning with the 2026 crop year, qualifying business entities will receive more favorable treatment for purposes of USDA payment limitations. The changes give farmers greater flexibility to use business entities for liability protection and other business purposes without unnecessarily limiting access to USDA farm programs.

LLCs and S corporations now receive pass-through treatment

Historically, the way a farm was structured could significantly affect its eligibility for USDA program payments. An operation conducted as an LLC or S corporation were subject to a single payment limitation at the entity level, even if multiple owners were actively involved in the farming operation.

Under the new rules, beginning with the 2026 crop year, qualifying LLCs and S corporations may receive multiple payment limitations. Each member of a qualifying pass-through entity who meets the applicable requirements for being actively engaged in farming can help qualify the entity for expanded payments.

This is an important change for farms that have used, or are considering using, an LLC or S corporation for business purposes. Farmers now have a greater ability to obtain the liability protection and organizational benefits of an entity while still having multiple qualifying members considered for USDA payment eligibility. Keep in mind that simply owning an interest in an LLC or S corporation is not enough. Members must satisfy the requirements for being actively engaged in farming, including making the required capital contributions and being actively involved in the farming operation.

Before making any changes solely for FSA programs, farmers should be sure to discuss the potential change with their attorney, accountant and crop insurance agent.  Changes to business entities can have tax, estate planning and crop insurance coverage ramifications.  Consulting with this team of advisors will help ensure that the correct decision is made for the business structure of the farming operation.

LLCs and S corporations must update their Farm Operating Plans for 2026

There is a special rule for the first year of these changes.  For program year 2026 only, farms operating as an LLC, S corporation, or another newly qualifying pass-through entity must file an updated Farm Operating Plan with FSA by September 15, 2026.  This deadline is particularly important because FSA needs current information regarding the ownership and structure of the entity and the contributions of its members. A farm that has been operating as an LLC or S corporation should not assume that its existing information on file with FSA is sufficient under the new rules. Farmers operating through one of these entities should contact their local FSA county office as soon as possible to determine what updates are needed. After 2026, FSA will generally return to using June 1 as the date for determining ownership interests in an entity.

Members can be paid wages or management compensation without being disqualified

Another important change addresses a concern that has existed for members of farm entities who contribute labor or management to the operation. Under the updated rules, members of an entity may receive compensation for their labor and management contributions and still use those same contributions to help qualify as actively engaged in farming. In other words, being paid wages or other compensation for work performed for the entity does not, by itself, prevent that member from using the labor or management contribution to satisfy the actively engaged in farming requirements.

This change provides more consistent treatment among different types of business entities. It is particularly important for LLCs and S corporations that compensate members or shareholders for the work they perform in the farming operation. Under previous programs, a farm had to choose between compensating an owner for labor or management and having that owner's contribution recognized for payment eligibility purposes.

ARC and PLC payment limit increases

The new provisions also increase the payment limitation for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. Beginning with the 2025 crop year, the payment limitation increased from $125,000 to $155,000. The limitation will be adjusted annually for inflation going forward.

More Information

For more information on the new payment limitation rules, be sure to join The National Agricultural Law Center’s webinar titled Payment Limitations, Eligibility, & Ag Tax Considerations.  The webinar will be held on September 16 at noon.  The webinar is free but registration is required.  Registration is available here.