Sponsor
Brad Sherman
Representative · D-CA
Representative · D-CA
The bill finances refundable gasoline rebates for households by taxing oil 'windfall' profits and placing proceeds in a dedicated trust fund—providing direct relief and transparency but risking higher consumer prices, administrative burdens, territorial complexity, and reduced Treasury budget flexibility.
Low- and moderate-income households and other taxpayers will receive refundable quarterly gasoline rebates that reduce out-of-pocket fuel costs, including people with little or no income tax liability who otherwise wouldn't benefit from nonrefundable credits.
Taxpayers and the public will see revenues from the oil 'windfall' tax deposited into a dedicated Treasury trust fund to finance the rebates, providing a direct funding source, reducing the need for ad hoc general-fund transfers, and improving transparency over use of the receipts.
Residents of U.S. territories will be eligible for equivalent payments or reimbursements so territorial residents are not excluded from relief and can receive comparable benefits.
Most consumers and small businesses could face higher gasoline and energy prices if oil firms pass the windfall tax through to customers, which could offset the value of the rebates.
Directing the tax receipts into a trust fund to pay rebates and funding payments to territories creates a fiscal cost and reduces Treasury budgeting flexibility, risks crowding out other priorities, and may make the tax effectively more permanent or politically entrenched.
The bill increases administrative and compliance burdens—requiring new IRS and industry reporting and tight Treasury rulemaking timelines—which raises costs for oil producers and the IRS and risks payment delays or errors for beneficiaries.
Based on analysis of 4 sections of legislative text.
Imposes a windfall profits tax on crude oil and creates a refundable gasoline price rebate paid from a new Treasury trust fund for tax years after 2025.
Official title: To amend the Internal Revenue Code of 1986 to impose a windfall profits excise tax on crude oil and to rebate the tax collected back to individual taxpayers until the President declares that all hostilities with Iran have ceased, the Strait of Hormuz is fully reopened, and the price of oil drops below $75 per barrel.
Introduced May 13, 2026 by Brad Sherman · Last progress May 13, 2026
Imposes a new federal tax on windfall profits from crude oil and creates a refundable gasoline price rebate for eligible individuals funded through a new Treasury trust fund. The tax and rebate provisions apply to taxable/calendar quarters and years beginning after December 31, 2025, and require Treasury rulemaking and administrative payments to U.S. possessions. The bill adds a new chapter to the Internal Revenue Code to collect the windfall profits tax, establishes a dedicated trust fund to receive tax receipts and other amounts, and directs refundable quarterly gasoline rebates to eligible U.S. individuals based on fund revenues and the number of eligible recipients.