North Carolina Fuel Tax Suspended Through November 30

North Carolina has temporarily suspended its state motor fuel excise tax, providing potential relief for truck drivers and motor carriers facing high fuel costs. The suspension applies to gasoline, diesel, and alternative fuels and will remain in effect through November 30, 2026. Governor Josh Stein signed Session Law 2026-62 on October 9, reducing the state’s motor fuel tax rate to zero beginning October 10.

The North Carolina Department of Revenue (NCDOR) issued an official notice on October 12 explaining how the temporary suspension affects fuel taxes, motor carrier reporting requirements, and the use of dyed diesel fuel.

North Carolina Fuel Tax Drops to Zero

Under the new law, North Carolina’s motor fuel excise tax has been reduced from 41 cents per gallon to zero for a limited period.

The suspension began October 10 and will expire November 30, 2026, unless lawmakers take additional action.

The temporary change covers several types of fuel used in transportation, including:

• Diesel fuel: Used by commercial trucks and other diesel-powered highway vehicles.
• Gasoline: Used by passenger vehicles and gasoline-powered commercial vehicles.
• Alternative fuels: Covered fuels subject to North Carolina’s motor fuel excise tax.

The suspension applies to motor fuels taxed under Articles 36C and 36D of Chapter 105 of the North Carolina General Statutes.

Although the state excise tax has been suspended, other taxes and fees may still apply.

What the North Carolina Fuel Tax Suspension Means for Truck Drivers

Diesel fuel is one of the largest operating expenses for trucking companies and independent owner-operators.

North Carolina’s temporary tax suspension could reduce the state excise tax included in diesel purchases during the relief period.

For example, the 41-cent-per-gallon reduction represents the following potential savings in the state excise tax component:

• 100 gallons: $41.00
• 150 gallons: $61.50
• 200 gallons: $82.00
• 250 gallons: $102.50

These figures represent the amount of state excise tax suspended, not guaranteed savings at the pump.

Actual retail diesel prices depend on several factors, including wholesale fuel costs, transportation expenses, retailer pricing, and other applicable taxes.

For interstate trucking companies, the final financial impact may also depend on how fuel purchases and miles traveled are treated under applicable motor carrier fuel tax rules.

The suspension does not eliminate federal diesel taxes or other applicable fuel-related charges.

Motor Carriers Must Continue Filing Fuel Tax Returns

The North Carolina Department of Revenue emphasized that the temporary suspension does not eliminate fuel tax reporting obligations.

Motor carriers and other taxpayers must continue filing all applicable motor fuel and motor carrier returns during the suspension period.

Required reporting includes:

• Total gallons of motor fuel purchased or used.
• Gallon equivalents for applicable alternative fuels.
• Mileage information required on motor carrier returns.
• Other information required under existing state reporting rules.

Even though the state excise tax rate is zero during the suspension, businesses must continue maintaining records and submitting required returns.

This distinction is particularly important for interstate trucking operations that travel through multiple states.

Other Fuel Taxes Remain in Effect

The new law does not suspend every tax associated with motor fuel.

According to NCDOR, the state’s fuel inspection tax remains in effect throughout the suspension period.

This tax must continue to be reported and paid on applicable motor fuel excise tax returns.

The department also clarified that existing sales and use tax rules remain unchanged.

Motor fuels and alternative fuels that qualified for sales and use tax exemptions before October 10 will continue to qualify during the suspension.

Dyed diesel fuel, however, generally remains subject to sales and use tax unless the purchaser provides the required exemption documentation.

These distinctions mean the temporary suspension should not be interpreted as eliminating all state fuel-related taxes.

North Carolina Changes Dyed Diesel Enforcement Rules

In addition to suspending the motor fuel excise tax, Session Law 2026-62 establishes temporary provisions involving dyed diesel fuel.

Dyed diesel is generally intended for qualifying off-highway uses and is subject to restrictions when used in vehicles operating on public highways.

Under the new law, North Carolina is temporarily waiving certain state civil and criminal penalties associated with highway use of dyed diesel.

The penalty waiver applies from October 9 through December 31, 2026.

It covers qualifying highway use for farming and agricultural purposes within North Carolina. It also covers certain persons who dispense or allow dyed diesel to be dispensed into highway vehicle fuel tanks.

The state’s definition of agricultural purposes includes crop cultivation, livestock operations, forestry, aquaculture, and related agribusiness activities.

However, the temporary state penalty waiver does not automatically eliminate federal dyed diesel restrictions or penalties.

Commercial truck drivers should not interpret the law as unrestricted permission to use dyed diesel in highway vehicles.

Additional Dyed Diesel Tax Relief for Certain Industries

North Carolina also established a separate temporary dyed diesel tax exemption for certain qualified users.

This provision applies from October 1 through December 31, 2026.

To qualify, a person must have an exemption certificate issued by NCDOR under one of the following categories:

• Qualifying farmer
• Conditional farmer
• Commercial logger
• Commercial fisherman
• Wildlife manager

Eligible certificate holders are exempt from North Carolina motor fuel excise tax on dyed diesel used to operate licensed highway vehicles during the specified period.

However, qualifying users must still file Form GAS-1259, the Motor Fuels Backup Tax Return, even when no state excise tax is owed.

The department also confirmed that dyed diesel sales and use tax requirements remain in place unless a separate exemption applies.

When Will the North Carolina Fuel Tax Return?

North Carolina’s temporary motor fuel excise tax suspension is scheduled to end November 30, 2026.

Unless the law changes, the suspension will no longer apply beginning December 1.

The separate dyed diesel penalty waiver and qualified-user tax exemption are scheduled to expire December 31, 2026.

NCDOR said it plans to release additional administrative guidance and frequently asked questions to clarify how the new law will be implemented.

For commercial trucking operations, the temporary suspension provides a potential reduction in diesel-related costs while leaving important reporting obligations in place.

The extent of the financial benefit will depend on fuel prices, purchasing practices, and the tax rules applicable to each motor carrier.