Gas Tax Relief Act
- Sponsor
- Rep. Malliotakis, Nicole [R-NY-11]
- Committees
- Ways and Means Committee (primary)
- Last action
- May 12, 2026
Bottom line
This bill aims to temporarily reduce fuel costs for consumers and businesses by eliminating federal gas and diesel taxes, while backfilling the affected trust funds from the General Fund to maintain infrastructure and environmental funding.
What it actually does
This bill temporarily suspends the federal excise taxes on gasoline and diesel fuel, including the Leaking Underground Storage Tank Trust Fund financing rate, for a period of at least 90 days. It mandates that the Treasury transfer funds from the General Fund to the Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund to offset the lost revenue, ensuring these funds remain solvent. The President is granted sole discretion to extend this tax holiday for an additional period or to phase in the re-implementation of the taxes.
Proponents argue
Supporters would argue this bill provides immediate and tangible financial relief to consumers and businesses facing high fuel prices, stimulating economic activity by reducing transportation costs. They would emphasize that the mandated transfers from the General Fund ensure critical infrastructure and environmental cleanup programs funded by the Highway and LUST Trust Funds are not jeopardized by the tax holiday.
Opponents contend
Opponents might argue that a gas tax holiday could exacerbate inflation by increasing demand, primarily benefit fuel companies rather than consumers through incomplete pass-through of savings, and create a precedent for raiding the General Fund to cover trust fund shortfalls, potentially leading to long-term fiscal instability and increased national debt.
The bill text is very short and easy to read, allowing ample time for comprehensive evaluation.
Section 2(a)
Temporary Suspension of Federal Excise Taxes on Taxable Fuels
This provision sets the federal excise tax rate on gasoline and diesel fuel to zero. It also suspends the Leaking Underground Storage Tank Trust Fund financing rate for these fuels. This tax holiday applies to fuel removed, entered, or sold on or after the date of enactment and before an 'applicable date,' which is initially 90 days after enactment.
Supporters argue
Supporters argue this directly lowers the cost of living and doing business by reducing a significant input cost, providing immediate relief during periods of high energy prices.
Critics contend
Critics contend that the savings may not be fully passed on to consumers, instead being absorbed by fuel companies, and that it could stimulate demand, potentially driving prices higher.
Tradeoffs
This provision balances immediate consumer relief against the potential for increased demand and the need to ensure savings are passed through to the end-user.
Section 2(b)
General Fund Transfers to Highway and LUST 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 (LUST) Trust Fund. These transfers are intended to offset the revenue lost to these trust funds due to the temporary suspension of fuel taxes, ensuring their solvency for infrastructure projects and environmental cleanup efforts.
Section 2(c)
Duration and Presidential Authority for Extension or Phased Reimplementation
This provision defines the 'applicable date' when the tax holiday ends. Initially, it is 90 days after enactment. However, it grants the President sole discretion to extend the holiday for an additional 125 days (totaling 215 days) if economic conditions merit. The President also has the authority to implement a phased restoration of the tax rates, rather than an abrupt return, starting 90 days after the date of enactment.