Sponsor
Mike Lee
Senator · R-UT
Senator · R-UT
The bill trades broad simplification of the tax code and modest near‑term fiscal savings against substantially higher costs to consumers and businesses, slower deployment of clean and advanced energy technologies, increased risk of stranded investments, and potential shortfalls in environmental and infrastructure funding.
Most taxpayers, filers, and the IRS: the bill repeals many specialized energy and clean‑fuel credits, substantially simplifying the tax code and reducing recordkeeping, reporting, and audit complexity for filers and administration.
Federal budget/taxpayers: repeal of numerous credits and deductions cuts projected tax expenditures and increases near‑term federal revenues (or reduces future outlays), modestly easing deficit pressure or freeing budget room.
Owners of property or facilities placed in service before the statutory cutoff dates: previously claimed credits and benefits are preserved (the repeal is generally prospective), avoiding retroactive clawbacks for existing investments.
Households, car buyers, homeowners, and businesses: repeal of many credits (clean vehicle credits, home efficiency credits, residential/commercial energy credits, clean fuels, SAF, clean electricity, etc.) increases net purchase and project costs for clean technologies and vehicles.
Consumers and the public interest: removal of broad incentives across renewables, storage, nuclear, hydrogen, carbon capture, biofuels, SAF, and advanced manufacturing is likely to slow deployment of low‑carbon technologies and make meeting emissions‑reduction goals harder.
Electricity and fuel consumers and supply chains: eliminating production and investment credits risks higher electricity, transportation fuel, and aviation fuel costs over time if projects are delayed, cancelled, or shifted abroad.
Based on analysis of 24 sections of legislative text.
Repeals many federal tax credits for clean energy, efficiency, clean vehicles/fuels, biofuels, and removes the petroleum tax; most changes effective Jan 1, 2026.
Official title: Amend the Internal Revenue Code of 1986 to repeal green energy tax subsidies.
Introduced May 13, 2025 by Mike Lee · Last progress May 13, 2025
Repeals a large package of recently created federal tax incentives for clean energy, energy efficiency, clean fuels, clean vehicles, advanced manufacturing, carbon sequestration, sustainable aviation fuel, and certain biofuel and alternative‑fuel credits. Most repeals and related conforming edits take effect for property placed in service, fuels produced or sold, vehicles acquired, or tax years beginning after December 31, 2025 (i.e., January 1, 2026), removing those credits from the Internal Revenue Code and deleting or changing many cross‑references throughout the tax code. The bill also eliminates the separate federal tax on petroleum in Chapter 38 and makes many technical and substantive conforming changes across the Code and related federal statutes to reflect the removed incentives and taxes. The changes affect taxpayers, project developers, manufacturers, fuel producers, vehicle buyers, state and federal program interactions, and IRS administration of those credits and associated rules.