Sponsors (5)
The bill provides near-term relief to drivers by temporarily eliminating the federal gasoline excise tax and preserves highway program funding, but it shifts the cost to the general fund—raising the deficit risk—may weaken short-term conservation incentives, and creates enforcement costs to ensure sellers pass the savings to consumers.
Drivers and most consumers will pay lower at-the-pump gasoline prices from enactment through Sept 30, 2026, because the federal gasoline excise tax is set to zero.
Highway programs and Leaking Underground Storage Tank (LUST) programs will continue to receive full funding despite the tax holiday because the Treasury must transfer amounts equal to lost receipts from the general fund.
Consumers gain legal protection because the bill directs fuel sellers to pass through the tax cut to prices and authorizes monetary penalties if sellers fail to reduce prices.
All taxpayers bear higher federal outlays because the tax cut is financed from the general fund, increasing pressure on the deficit or requiring offsets in other spending.
Lower short-term fuel prices could reduce incentives for fuel conservation and delay investment in alternative fuels or efficiency during the holiday period.
Treasury and fuel regulators will face additional administrative and enforcement costs and burdens to monitor pass-through and collect penalties.
Based on analysis of 2 sections of legislative text.
Suspends the federal gasoline excise tax and LUST financing rate for gasoline through Sept 30, 2026, with Treasury backfilling lost Highway Trust Fund and LUST receipts from the general fund.
Official title: To amend the Internal Revenue Code of 1986 to provide a gasoline tax holiday.
Introduced March 12, 2026 by Chris Pappas · Last progress March 12, 2026
Sets the federal gasoline excise tax and the LUST financing rate on gasoline to zero from enactment through September 30, 2026, creating a temporary federal gas tax holiday. It requires the Treasury Secretary to reimburse the Highway Trust Fund and the LUST Trust Fund from the general fund for lost receipts, directs that the tax reduction be passed to consumers, authorizes penalties for fuel sellers who fail to pass through the reduction, and directs the Treasury to use its authorities to ensure consumer benefit.