Sponsors (2)
Last progress June 5, 2025 (8 months ago)
Introduced on June 5, 2025 by Josh Harder
Referred to the House Committee on Ways and Means.
Sets the federal gasoline excise tax rate to zero and suspends the Leaking Underground Storage Tank (LUST) financing rate for gasoline removed, entered, or sold from enactment until January 1, 2026. The Treasury must make up the lost receipts to the Highway Trust Fund and the LUST Trust Fund from the general fund. Congress states a policy that consumers should see the price reduction at the pump and authorizes the Secretary to use available authorities to encourage or enforce pass‑through to consumers.
For gasoline removed, entered, or sold on or after the date this Act is enacted and before January 1, 2026, the federal tax rate under the Internal Revenue Code of 1986 (section 4081(a)(2)(A)(i)) is set to zero.
The Leaking Underground Storage Tank (LUST) financing rate under section 4081(a)(2) of the Internal Revenue Code shall not apply to gasoline covered by the zero-rate rule above.
The Secretary of the Treasury must transfer from the general fund to the Highway Trust Fund and to the Leaking Underground Storage Tank Trust Fund amounts equal to the reduction in amounts that would have been credited to each Trust Fund because of the tax change in subsection (a).
Amounts transferred to the Leaking Underground Storage Tank Trust Fund under the preceding transfer are to be treated for purposes of sections 9503(b)(1) and 9508(b)(2) as taxes received in the Treasury under section 4081 attributable to the LUST financing rate.
Amounts transferred to the Highway Trust Fund under the preceding transfer are to be treated for purposes of section 9503(b)(1) as taxes received in the Treasury under section 4081 that are not attributable to the LUST financing rate.
Who is affected and how:
Consumers / Motorists: Likely to see some reduction in the federal portion of the pump price while the holiday is in effect, though actual savings depend on whether and how quickly fuel suppliers and retailers pass the reduction through to retail prices. Low‑ and middle‑income households and frequent drivers stand to benefit most from any pass‑through.
Commercial motor carriers, trucking firms, delivery services, and other fuel‑intensive businesses: Could see meaningful near‑term reductions in operating fuel costs, improving short‑term cash flow and lowering transport costs.
Fuel supply chain (refiners, distributors, and retailers): Must adjust invoicing, accounting, and tax reporting to reflect a zero federal excise tax; retail pricing decisions determine distribution of benefits between suppliers and consumers.
Highway Trust Fund and LUST Trust Fund programs: Will not lose funding during the suspension because Treasury is required to replace lost excise receipts from the general fund; this preserves ongoing infrastructure and LUST activities but shifts the fiscal burden to general revenues.
Federal budget and deficit: Replacement payments from the general fund increase outlays and may raise deficits relative to a baseline where excise receipts continued to flow into the trust funds.
State and local governments: Not directly changed by federal tax suspension, since state/local fuel taxes remain in effect, but they may experience indirect effects (e.g., changes in traffic or fuel consumption). States' transportation funding tied to federal matching or programs should be preserved because federal trust fund receipts are replaced.
Enforcement and market behavior: The policy statement and enforcement authority aim to increase the likelihood that consumers benefit, but actual enforcement tools and market dynamics (retailer margins, wholesale pricing) determine outcomes. Monitoring and audits may be needed to ensure compliance with pass‑through expectations.