Maritime Fuel Tax Parity Act
- Bill Number
- H.R. 2925
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-04-17: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-06-11T23:26:37Z
AI-Generated Summary
Purpose
The Maritime Fuel Tax Parity Act (H.R. 2925) aims to provide tax relief to certain U.S. maritime operators by extending an existing exemption from the federal excise tax on alternative motorboat fuels. This tax is a fee imposed on specific goods, such as fuels used in vessels. The bill targets vessels engaged in domestic trade along the Atlantic or Pacific coasts to promote fairness in fuel taxation for coast-specific operations.
Key Provisions
- Extension of Tax Exemption: Amends Section 4041(g) of the Internal Revenue Code (IRC) of 1986 to include an exemption for alternative motorboat fuels (e.g., diesel or other non-gasoline fuels) sold or used by qualifying vessels.
- Qualifying Vessels: The exemption applies to vessels that meet the criteria in IRC Section 4042(c)(1)—typically meaning vessels not primarily involved in foreign trade—and are actively engaged in trade between ports on the Atlantic or Pacific coasts of the United States, including its territories or possessions.
- Effective Date: The changes apply to fuel sales after December 31, 2023.
Significant Changes to Existing Law
- Under current law, the excise tax exemption in IRC Section 4041(g) primarily covers fuels used in vessels or aircraft for international or certain interstate operations. This bill expands it to include purely domestic, coast-wise trade (operations limited to one coast, such as between East Coast ports or West Coast ports), closing a gap for operators not crossing oceans or engaging in international routes.
- No other major alterations to the IRC are proposed; the change is a targeted addition of one sentence to the existing exemption framework.
Potential Impacts
- On Government Agencies: The U.S. Treasury and Internal Revenue Service (IRS) may see a modest reduction in excise tax revenue from fuel sales, though the scale depends on affected volumes. Administrative updates would be needed to enforce the expanded exemption.
- On Citizens and Businesses: Lowers fuel costs for qualifying vessel operators, potentially reducing shipping and transport expenses for goods moved between U.S. coastal ports. This could benefit consumers through lower prices for coastal trade-dependent products (e.g., regional shipping of goods).
- On International Relations: Minimal direct impact, as the bill focuses on domestic U.S. operations and does not affect international trade or foreign vessels.
Main Stakeholders Affected
- Maritime Industry Operators: Primary beneficiaries, including shipping companies, cargo vessel owners, and fuel users engaged in Atlantic or Pacific coast trade (e.g., operators in Florida, California, or Hawaii ports).
- Fuel Suppliers and Distributors: May experience shifts in demand for tax-exempt alternative fuels.
- U.S. Taxpayers and Government: Indirectly affected through forgone tax revenue, balanced against economic support for domestic maritime activities.
- Coastal Communities and Businesses: Could gain from more efficient, lower-cost regional trade, supporting jobs in shipping, logistics, and related sectors.
Notable Legal, Constitutional, or Political Implications
- Legal Implications: Strengthens tax equity under the IRC by aligning treatment for domestic coast-wise vessels with existing exemptions for other operations, potentially reducing litigation over tax disparities. No challenges to enforceability are evident, as it builds directly on established code sections.
- Constitutional Implications: None significant; the bill involves congressional authority over taxation (Article I, Section 8 of the U.S. Constitution) and does not infringe on states' rights or interstate commerce in a controversial way.
- Political Implications: Bipartisan support (introduced by representatives from both parties) suggests appeal to coastal districts with strong maritime economies. It promotes "tax parity" without broad fiscal overhaul, aligning with efforts to support U.S. domestic industries amid energy transition to alternative fuels.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (10)
Rep. Rutherford, John H. [R-FL-5], Rep. Buchanan, Vern [R-FL-16], Rep. Garamendi, John [D-CA-8], Rep. Tokuda, Jill N. [D-HI-2], Rep. Boyle, Brendan F. [D-PA-2], Rep. Sánchez, Linda T. [D-CA-38], Rep. Steube, W. Gregory [R-FL-17], Rep. Haridopolos, Mike [R-FL-8], Rep. Fine, Randy [R-FL-6], Rep. Begich, Nicholas J. [R-AK-At Large]
Recent Actions
- 2025-04-17: Referred to the House Committee on Ways and Means.
- 2025-04-17: Introduced in House
- 2025-04-17: Introduced in House
Bill Versions
- Maritime Fuel Tax Parity Act — issued 2025-04-17 — PDF (2 pages)