Sponsors (2)
Official title: To provide a diesel fuel tax holiday.
Introduced May 12, 2026 by Eugene Simon Vindman · Last progress May 12, 2026
The bill gives temporary diesel price relief and preserves highway and cleanup funding by using general‑fund transfers, but does so at the cost of higher federal outlays, reduced dedicated revenue stability for transportation, and a risk that consumers may not fully see the intended price reductions.
Drivers, households, and businesses using diesel will pay less for diesel while the suspension is in effect, lowering transportation and goods delivery costs.
Highways and transit programs will keep receiving needed funds because the general fund will transfer amounts to replace lost diesel excise receipts, preserving planned transportation projects and jobs.
The Treasury is directed and empowered to help ensure reductions flow through to consumer fuel prices, potentially improving enforcement of pass-through and benefiting shoppers and taxpayers.
All taxpayers face larger federal outlays because the general fund will backfill excise receipts, which may increase the deficit or crowd out other federal spending priorities.
Suspending the diesel excise tax temporarily reduces a stable, dedicated revenue stream for transportation, which could complicate long‑term planning and funding certainty for states and transit agencies.
If fuel suppliers do not fully pass the tax cut through to retail prices, middle‑class families and small businesses may not receive the intended price relief despite the policy and Treasury authority.
Based on analysis of 2 sections of legislative text.
Temporarily sets the federal diesel excise tax to zero through Dec 31, 2026, suspends the LUST rate for that diesel, and directs Treasury to repay affected trust funds from the general fund.
Temporarily sets the federal excise tax on diesel (except kerosene) to zero for diesel removed, entered, or sold from enactment through December 31, 2026, and suspends the LUST financing rate for that diesel. The Treasury must replace the lost receipts to the Highway Trust Fund and the Leaking Underground Storage Tank (LUST) Trust Fund by transferring equal amounts from the general fund and treat those transfers as if they were the excise receipts for specified statutory purposes. The bill also states a congressional policy that the tax cut's benefits should be passed to consumers and authorizes the Secretary of the Treasury to use applicable authorities to help ensure that happens.