Sponsors (3)
The bill reduces fuel costs for certain vessel operators (and potentially lowers shipping costs) by exempting specified alternative motorboat fuels from the federal excise tax, but does so at the cost of lower federal revenue and by granting a selective tax advantage that may be perceived as unfair.
Owners and operators of qualifying vessels in Atlantic and Pacific trade will pay no federal motorboat fuel excise tax on qualifying alternative fuels starting in 2026, lowering their fuel costs and potentially reducing shipping or transport costs for businesses that rely on those routes.
All taxpayers will face reduced federal excise tax receipts because exempting certain alternative motorboat fuels will lower federal revenue, which could increase budgetary pressure or require offsets from other funding or taxpayers.
Small-business owners and other fuel users may be disadvantaged because the bill creates a targeted tax advantage for certain vessel owners/operators, producing unequal treatment compared with other maritime and land-based fuel consumers and potentially distorting competition.
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 for fuel sold/used after Dec 31, 2025.
Introduced February 12, 2025 by Lisa Murkowski · Last progress February 12, 2025
Expands an existing federal excise-tax exemption for certain alternative motorboat fuels so it also applies to fuel sold for use by qualifying vessels that are actually engaged 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.