Montana Fuel Taxes Remain Steady Through 2026
Lawmakers will not hold a special session to adjust rates, keeping gas and diesel taxes unchanged for local drivers.
Updated on Oct. 15, 2026 in Taxes
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Montana lawmakers have opted against a special session to reduce state fuel taxes, keeping current rates intact. Meanwhile, officials have authorized the use of red-dyed diesel on public roads through November 23 to help manage rising costs for state residents.
Why it matters
State officials maintain that fuel tax revenue is essential for funding highway and bridge maintenance and securing federal matching dollars. Because only the Legislature has the authority to adjust these rates, residents will see no change in tax-related costs at the pump until at least the 2027 legislative session.
Montana levies 33 cents per gallon on gas and 30 cents per gallon on diesel, contributing to $300 million in annual state revenue. These rates remain unchanged while residents grapple with fuel prices that have risen 55% for gas and 78% for diesel since the start of 2026.
The players
Kristen Juras
The Lieutenant Governor of Montana who issued the executive order permitting the use of red-dyed diesel on public roads.
President Donald Trump
The current President of the United States who signed an order suspending the federal ban on using red-dyed diesel on public roads.
The details
State fuel tax rates are fixed by law and can only be altered through action by the Montana Legislature. Currently, these taxes account for a portion of the total cost per gallon, which also includes 51 cents in federal taxes for gas and 54 cents for diesel. By declining a special session, the state preserves its revenue stream for infrastructure projects while utilizing an executive order to allow the use of lower-cost red-dyed diesel for road travel until November 23.
Timeline
March 2026: Diesel prices began to spike.
November 23, 2026: Expiration of executive order allowing red-dyed diesel use.
January 2027: Start of the Montana biennial legislative session.
Money Landscape
This decision defers potential tax adjustments until the Montana biennial legislative session begins in 2027. It follows a trend seen in states like Georgia, Indiana, Ohio, and Utah, where officials have recently evaluated or modified fuel tax policies in response to market volatility.
Drivers can utilize red-dyed diesel on public roads through November 23 to potentially lower fuel expenses. Beyond that date, standard fuel tax rates remain in effect, and you should consult with a tax professional regarding how these fuel costs impact your specific business or household budget.
The takeaway
While state fuel taxes will not be reduced before 2027, the temporary allowance for red-dyed diesel provides a limited window for cost savings. Residents should monitor fuel expenses and review their transportation budgets ahead of the November 23 expiration date.
Further reading
For more information on state tax changes, visit the Montana Taxes section.
Source note: This article includes information reported by Montana Free Press.
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