Sponsors (11)
The bill lowers fuel costs and tax compliance burdens for qualifying coastwise vessels and their fuel sellers but does so by reducing federal excise revenue and creating unequal treatment and added enforcement complexity.
Owners, lessees, and operators of qualifying coastwise-trade vessels pay a lower federal excise tax on alternative motorboat fuel, reducing their operating fuel costs.
Fuel sellers to qualifying vessels are not liable for the federal excise tax on those sales after Dec 31, 2023, simplifying tax treatment and reducing sellers' tax compliance burden.
Federal excise tax receipts will decline due to the exemption, potentially reducing funds available for federal programs financed by these taxes.
The exemption could incentivize re-routing or reclassification to qualify for the tax break, increasing compliance and enforcement complexity and administrative costs for IRS and Treasury.
Non-qualifying vessels and fuel users receive no benefit, creating unequal tax treatment across similar maritime operators.
Based on analysis of 2 sections of legislative text.
Broadens a federal excise-tax exemption so certain alternative marine fuels used by vessels in Atlantic or Pacific coastwise trade (including territories) are exempt for sales after Dec 31, 2023.
Introduced April 17, 2025 by Aaron Bean · Last progress April 17, 2025
Expands a federal fuel tax exemption so certain alternative marine fuels used by vessels engaged in trade between Atlantic or Pacific U.S. ports (including territories and possessions) are treated like exempt motorboat fuels. The change applies to fuel sales after December 31, 2023, and only alters the tax treatment of those fuels — it does not authorize new spending or create regulatory programs.