Sponsors (2)
The bill provides short-term fuel-cost relief for drivers and businesses while preserving road and cleanup funding through general-fund transfers, shifting costs to taxpayers and creating administrative and budgeting uncertainty.
Drivers, small businesses, and transportation workers pay less per gallon during the temporary federal fuel tax suspension, reducing short-term fuel costs for middle-class families, small-business owners, and transportation workers.
Highway maintenance and Leaking Underground Storage Tank (LUST) cleanup programs continue receiving support because the bill directs transfers from the general fund to replace the lost federal fuel excise receipts, preventing immediate funding gaps for roads and environmental cleanup.
Consumers and businesses get a short, predictable window (90–180 days if extended by the President) to plan purchases and timing to benefit from the tax suspension.
All taxpayers effectively bear the cost because the bill replaces lost excise receipts with general fund transfers, shifting funding pressure onto other federal programs and the broader taxpayer base.
Giving the President discretion to certify and extend the tax suspension creates uncertainty for states and trust funds that rely on steady excise receipts, complicating long-term budgeting.
Temporarily suspending the fuel tax reduces the price signal for highway funding and adds administrative complexity for distributors and Treasury to track removed/sold fuel and process reimbursements, which could disrupt short-term program administration.
Based on analysis of 2 sections of legislative text.
Temporarily suspends specified federal fuel excise taxes in 2026 and requires Treasury to transfer equivalent amounts to the Highway Trust Fund and LUST Trust Fund.
Suspends federal excise tax rates on specified gasoline and certain fuel sales for a temporary 2026 tax holiday and requires the Treasury to replace the lost excise receipts by transferring equal amounts from the general fund to the Highway Trust Fund and the Leaking Underground Storage Tank (LUST) Trust Fund. The suspension applies from enactment until an "applicable date" (90 days after enactment, or 180 days if the President certifies economic need). The measure sets the affected federal fuel excise rates to zero for fuel removed, entered, or sold during the holiday, waives the LUST financing rate for that period, and treats the Treasury transfers as if they were tax receipts for trust fund accounting and allocation purposes.
Official title: Amend the Internal Revenue Code of 1986 to provide a tax holiday for gasoline and diesel fuel.
Introduced May 11, 2026 by Joshua David Hawley · Last progress May 11, 2026