Sponsors (3)
The bill lowers fuel costs for coastwise vessels and encourages cleaner marine fuels by exempting qualifying fuels from federal excise tax, at the cost of reduced federal fuel-tax revenue and added administrative complexity.
Small-business owners and other operators of vessels engaged in coastwise trade will pay no federal excise tax on qualifying alternative marine fuels sold after Dec 31, 2025, lowering operating fuel costs and improving profitability.
Operators of eligible coastwise vessels and transportation workers may increase use of alternative marine fuels because those fuels are tax-exempt after Dec 31, 2025, potentially reducing maritime emissions.
All U.S. taxpayers could face higher deficits or a need for offsetting cuts or new revenue because the exemption reduces federal fuel excise receipts.
Taxpayers and federal employees administering fuel-excise rules will face increased compliance and administrative burden due to complex eligibility rules (vessel descriptions and actual coastwise trade requirements).
Based on analysis of 2 sections of legislative text.
Extends the federal excise tax exemption for certain alternative motorboat fuels to qualifying vessels engaged in Atlantic or Pacific coastwise trade, effective after Dec 31, 2025.
Introduced February 12, 2025 by Lisa Murkowski · Last progress February 12, 2025
Extends an existing federal excise tax exemption for certain alternative motorboat fuels to qualifying vessels that operate in coastwise trade between Atlantic or Pacific U.S. ports (including territories and possessions). The change applies to fuel sold for use or used after December 31, 2025, and is implemented by adding a clarifying sentence to the Internal Revenue Code provision that governs motorboat fuel exemptions.