Sponsors
Introduced May 13, 2025 by Mike Lee · Last progress May 13, 2025
The bill sharply simplifies the tax code and reduces federal tax expenditures—raising near‑term revenue and lowering compliance burdens—at the cost of removing a wide array of clean‑energy, fuel, vehicle, and efficiency incentives, which will likely slow clean‑technology deployment, raise costs for many households and businesses, and reduce funding for certain environmental and infrastructure programs.
Nearly all taxpayers, tax preparers, and the IRS: the bill repeals many specialized energy and related credits, substantially simplifying the tax code, reducing cross‑references, and lowering compliance and administrative burdens for filers and Treasury/IRS.
Federal budget/taxpayers: eliminating multiple targeted credits lowers projected federal tax expenditures and is expected to increase near‑term federal revenues or reduce future revenue losses, modestly easing deficit pressure.
Fuel purchasers and consumers: the bill abolishes the federal petroleum/environmental excise tax after Jan 1, 2026, which reduces per‑unit fuel tax costs at the pump for consumers and businesses.
Millions of Americans (electricity consumers, households, businesses) and the climate: removing a broad suite of clean‑energy, clean‑fuel, vehicle, and efficiency tax incentives will likely slow deployment of renewables, storage, carbon capture, hydrogen, advanced biofuels, EVs, residential solar/heat pumps, and SAF, increasing long‑run greenhouse gas emissions and making climate goals harder to达到
Households and small/medium businesses: buyers of new and used clean vehicles, homeowners installing energy upgrades, and businesses installing clean-energy or refueling infrastructure will face higher net purchase and installation costs without credits, reducing affordability and consumer adoption.
Project developers, manufacturers, and investors: widespread repeal creates planning uncertainty and risks stranded investments for firms that made decisions expecting continuing credits, reducing investment and potentially raising financing costs for new projects.
Based on analysis of 24 sections of legislative text.
Repeals a wide set of federal clean‑energy, clean‑fuel, and clean‑vehicle tax credits and related code provisions, removing incentives for production, investment, and consumer purchases mostly after Dec 31, 2025.
Repeals a wide set of federal tax incentives for clean energy, clean fuels, electric and alternative vehicles, energy-efficient homes and buildings, carbon sequestration, hydrogen, advanced manufacturing credits, and related producer and fuel credits. Most repeals and conforming code edits take effect for property placed in service, fuel produced/used, vehicles acquired, or expenditures made after December 31, 2025 (with a few edits effective January 1, 2026). The changes remove dozens of Internal Revenue Code provisions and adjust many cross-references across the tax code and some related federal statutes, shifting federal tax policy away from production- and investment-based clean-energy incentives and narrowing categories used in other tax and transfer provisions.