Sponsors (2)
The bill returns excise taxes to qualifying removers of dyed diesel/kerosene—lowering fuel costs for those entities and creating a clearer claims framework—while reducing federal revenue and imposing verification workloads and penalty risks on claimants and administrators.
Businesses, utilities, and other entities that qualify (e.g., small-business owners, transportation firms, energy companies) will pay lower fuel costs because refundable tax relief reduces the net excise tax burden on eligible indelibly dyed diesel or kerosene.
Entities that remove eligible indelibly dyed diesel or kerosene from terminals (including utilities and fuel sellers) will receive refunds of previously paid section 4081 excise tax on those fuels, directly returning previously paid tax liabilities to claimants.
Taxpayers and federal administrators benefit from a clearer, administrable claims process that deters improper claims by subjecting refund requests to existing excessive-claim penalties (section 6675), improving enforcement consistency.
All taxpayers may face higher federal revenue costs because refundable payments reduce excise tax receipts, potentially increasing pressure on other taxes or federal spending choices.
Small businesses, utilities, and other claimants risk civil penalties if they make excessive or improper refund claims because claims are subject to penalties under section 6675.
The IRS and Treasury will face increased administrative burden to verify removal claims and process refunds, creating additional workload for federal employees and potential delays for claimants.
Based on analysis of 2 sections of legislative text.
Introduced March 25, 2025 by Ron Johnson · Last progress March 25, 2025
Creates a refundable tax payment for people who remove indelibly dyed diesel fuel or kerosene from a terminal, reimbursing the section 4081 tax previously paid on that fuel (with no interest). To get the payment, a person must show the IRS they meet the eligibility rules for removal of taxed fuel that is exempt under section 4082(a). Claims that are excessive may incur penalties under section 6675. The rule applies to removals that occur on or after 180 days after the law is enacted.