Absolutely fucks up the tax system. It would be a disaster for commercial trucking and I am betting you will not see widespread use of the untaxed fuel even if "allowed" as no operator wants to get on the wrong side of DOT after this is said and done.

This of course does not apply to light duty trucks and diesel cars where rednecks run red fuel in them almost all the time.

Hanlon's razor has been getting an exceptional workout these days. It could just be that Trump is monumentally stupid and didn't think about this at all.

We don't tax fuel enough to maintain the roads as is. The states that are removing the gas tax going to see really terrible roads in the coming years because the funding mechanism went away. It also means we might have to shift to registration fees as the primary mechanism to fund roads, which we were already considering for electric cars but then we're going down this road you might have to make it Universal to all vehicles, preferably increasing with vehicle weights

Not entirely; off road diesel is usually the exact same distillate as on road diesel but dyed for tax purposes. AKA the distributors quite literally pull the diesel from the exact same bulk tank but then dye it for delivery. Both onroad and offroad are a ultra low sulfur refined base oil with motor lubricity and cleaning additives. Actual heating oil is a similar distillate but without all the motor fuel additives and (i think) looser sulfur restrictions. It usually comes from a different supply chain than offroad diesel, except in more rural areas where it may be regular dyed diesel for supply chain reasons.

In farm counties sure, there's probably double the amount of offroad diesel storage than there is onroad, they'd be fine. everywhere else though good luck lol.