To amend the Internal Revenue Code of 1986 to temporarily suspend certain fuel excise taxes for fuel separated during periods in which the national average price of gasoline exceeds $3.99 per gallon, and to prohibit certain credits or deductions for oil and gas companies during such periods.
- Sponsor
- Rep. Boyle, Brendan F. [D-PA-2]
- Committees
- Ways and Means Committee (primary)
- Last action
- Apr 30, 2026
Bottom line
This bill aims to provide immediate relief to consumers at the pump by reducing federal gas taxes during high-price periods, while simultaneously offsetting the revenue loss to infrastructure trust funds and restricting tax benefits for oil and gas companies.
What it actually does
This bill proposes a temporary suspension of federal fuel excise taxes, reducing the tax by 1 cent for each cent the national average price of gasoline exceeds $3.99 per gallon. It also prohibits certain tax credits and deductions for oil and gas companies during these high-price periods. Crucially, it mandates transfers from the general fund to the Highway Trust Fund and Leaking Underground Storage Tank Trust Fund to offset any revenue loss from the tax suspension.
Proponents argue
Supporters would argue that this bill provides direct and tangible financial relief to consumers struggling with high gas prices, making fuel more affordable for commuters and businesses. They would also highlight the bill's mechanism to ensure that critical infrastructure funds are not depleted, and emphasize the fairness of suspending tax breaks for oil companies during periods when they are reporting high profits.
Opponents contend
Opponents might contend that the proposed tax suspension offers only a marginal, temporary fix that fails to address the underlying causes of high energy costs and could encourage increased fuel consumption. They may also argue that restricting tax credits and deductions for oil and gas companies could disincentivize domestic production and investment, potentially exacerbating future supply issues and keeping prices high in the long run.
The bill text is very short and straightforward, allowing for quick comprehension of its core mechanisms.
Section 1(a)(1), amending Section 4081 of the Internal Revenue Code of 1986.
Temporary Reduction of Federal Fuel Excise Tax
This provision reduces the federal fuel excise tax by 1 cent for every cent the national average price of gasoline exceeds $3.99 per gallon, but not below zero. This reduction applies during any month when the national average price of gasoline surpasses this threshold, aiming to lower the cost of fuel for consumers.
Supporters argue
Supporters argue this provides immediate and tangible financial relief to American families and businesses facing high fuel costs, directly lowering prices at the pump when they are most burdensome.
Critics contend
Critics might argue that the reduction is too small to have a significant impact on consumer behavior or overall prices, and that it could be seen as a political gesture rather than a substantive solution to energy inflation.
Tradeoffs
Balances the desire for consumer relief against potential impacts on federal revenue and energy policy signals.
Section 1(a)(2)
General Fund Transfers to Highway and Leaking Underground Storage Tank Trust Funds
This provision mandates that the Secretary of the Treasury transfer amounts from the general fund to the Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund. These transfers are designed to offset any revenue reductions to these trust funds caused by the temporary suspension of fuel excise taxes, ensuring that funding for infrastructure projects and environmental cleanups is not negatively impacted.
Section 1(b), amending Section 263(c) of the Internal Revenue Code of 1986.
Prohibition of Intangible Drilling Costs Deduction
This provision disallows the deduction for intangible drilling and development costs (IDCs) for oil and gas companies during any month when the national average price of gasoline exceeds $3.99 per gallon. IDCs typically include expenses like wages, fuel, repairs, and supplies that are necessary for drilling but have no salvage value.
Section 1(c), amending Section 43 of the Internal Revenue Code of 1986.
Prohibition of Enhanced Oil Recovery Credit
This provision eliminates the enhanced oil recovery (EOR) credit for costs paid or incurred by oil and gas companies during any month when the national average price of gasoline exceeds $3.99 per gallon. The EOR credit is designed to incentivize the use of costly techniques to extract additional oil from existing fields.
Section 1(d), amending Section 45I(d) of the Internal Revenue Code of 1986.
Prohibition of Marginal Well Production Credit
This provision disallows the credit for producing oil and gas from marginal wells during any month when the national average price of gasoline exceeds $3.99 per gallon. Marginal wells are those that produce small amounts of oil or gas, and the credit is intended to keep them operational.
Section 1(e)
Effective Date
The amendments made by this section, including the fuel tax suspension and the prohibition of certain oil and gas tax benefits, will apply to taxable years beginning after December 31, 2025. This sets the timeframe for when the bill's provisions would take effect if enacted.
Specifies how the transferred funds to the Highway Trust Fund and Leaking Underground Storage Tank Trust Fund are to be treated for accounting purposes, ensuring they are correctly categorized as if they were original tax receipts.
Section 1(a)(2)(B)
Why it matters:Standard legislative practice for ensuring proper accounting and integration with existing tax law. It's a technical detail necessary for the mechanism to work correctly.
Case for: Ensures the integrity and proper functioning of the trust funds, preventing accounting discrepancies that could complicate future budgeting or legal challenges.
Case against: No specific case against, as it's a technical, administrative detail.
Estimated impact: Ensures the proper allocation of potentially billions of dollars in transfers, maintaining the financial stability of critical infrastructure and environmental funds.
States that the amendments made by the bill apply to taxable years beginning after December 31, 2025.
Section 1(e)
Why it matters:Standard legislative practice for specifying when a law takes effect. While important, it's often placed at the end as an administrative detail.
Case for: Provides a clear start date for the new tax rules, allowing businesses and agencies time to prepare for implementation.
Case against: If the bill is intended as an urgent response to current high gas prices, a future effective date (e.g., over 6 months from the bill's introduction date) could be seen as delaying necessary relief or action.
Estimated impact: Determines the timeframe for when consumers might see tax relief and when oil companies would face new tax restrictions, potentially impacting billions in revenue and company profits.