What's New for Petroleum Tax

Update on Federal Executive Order Regarding Tax Relief on Diesel Fuel

On October 5, 2026, President Donald Trump issued an executive order on Emergency Tax Relief on Diesel Fuel (whitehouse.gov). While the order applies to federal government agencies and references federal excise taxes for dyed diesel fuel, the Minnesota Department of Revenue is monitoring the situation and any outcome from the order. 

The federal executive order does not change state laws governing the use of dyed diesel fuel in Minnesota or the taxes that apply. The Minnesota Department of Revenue does not have the authority to suspend these taxes. Under the current circumstances, any changes in this area would need to be made through legislative action.

State-Level Response

Governor Tim Walz issued Emergency Executive Order 26-11 (mn.gov) on October 1 providing temporary relief for vehicles transporting covered harvest products which includes corn, soybeans, wheat, potatoes, sugar beets, carrots and forest products. Relief is limited to increasing weight limits for transporting defined covered harvest products as established in the executive order. To be in compliance, transportation vehicles must follow all Minnesota Department of Transportation permanent and temporary permitting requirements, and road and weight restrictions established in the state executive order and Minnesota statute.

All other laws in Minnesota remain in effect.

Minnesota Motor Fuel Tax Rate for 2027

According to state law, the Minnesota Motor Fuel Tax will increase on January 1, 2027. The new combined rate will be $0.328, consisting of the $0.293 excise tax rate for gasoline and special fuel products, plus the $0.035 per gallon debt service surcharge. Alternative fuels rates will also increase. 

For a list of our current rates, go to Petroleum Tax Fuel Excise Tax Rates and Fees. 

Minnesota Qualified Service Station Credit for 2027

Effective January 1, 2027, the rate for qualifying service station credit will change for North Dakota and South Dakota.

• North Dakota will be $0.068 per gallon for both gasoline and diesel fuel.
• South Dakota will be $0.032 per gallon for gasoline and $0.018 per gallon for diesel fuel.

To claim the qualifying service station credit use schedule code 5PN for North Dakota and 5PS for South Dakota.

For more details about this credit, go to Minnesota Statute 296A.16, subd. 5.

Petroleum Tank Cleanup Fee for July-October 2026

The Minnesota Petrofund Board notified the Minnesota Department of Revenue that we must collect the Petroleum Tank Cleanup Fee for July, August, September, and October 2026.

Distributors
Please include the $.02 per gallon fee when you file these four returns.

Special Fuel Dealers
You do not report the fee. Your supplier will charge the $.02 gallon fee when you purchase fuel September through December. This will show on your invoices.

For more information, go to Petroleum Tax Tank Cleanup Fee.

Questions?
For the Cleanup Fee, contact our Petroleum Tax Unit at 651-296-0889 or petroleum.tax@state.mn.us.

For the Petrofund, contact the Petrofund Board at 651-539-1515 or petrofund.commerce@state.mn.us.

Petroleum Debt Service Surcharge Rate

The Debt Service Surcharge Rate will remain at $0.035 per gallon for July 1, 2026 – June 30, 2027.

The surcharge is determined by amount needed to pay the debt service on the trunk highway bond which is used to construct, improve, and maintain Minnesota's interstates and highways.

The surcharge is included in the per gallon fuel rate. For example, the Minnesota gasoline excise tax is $0.291 per gallon and the surcharge is $0.035 per gallon for a combined rate of $0.326 per gallon.

For a list of rates, go to Fuel Excise Tax Rates and Fees on our website.