Iran War Oil Crisis Windfall Profits Tax Act

Bill Number

H.R. 8803

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Taxation

Status

Introduced

Latest Action

2026-05-13: Referred to the House Committee on Ways and Means.

Last Updated

2026-06-03T17:21:58Z

AI-Generated Summary

Summary of H.R. 8803: Iran War Oil Crisis Windfall Profits Tax Act

Purpose of the Legislation

This bill amends the Internal Revenue Code of 1986 to create a temporary excise tax on certain crude oil activities. The tax aims to capture excess profits from oil during a period of elevated prices linked to hostilities involving Iran. Revenues from the tax would fund rebates to individual taxpayers to offset gasoline price increases. The measures apply until the President declares that hostilities with Iran have ended, the Strait of Hormuz is reopened, and the price of West Texas Intermediate oil falls below $75 per barrel.

Key Provisions Outlined

• Windfall Profits Tax (Section 2): Adds Chapter 56 to the Internal Revenue Code, imposing an excise tax on "covered taxpayers" for each barrel of taxable crude oil extracted in or entered into the United States. The tax applies quarterly starting from the bill's enactment date.
• Taxable crude oil includes crude oil, condensates, natural gasoline, gasoline, and diesel.
• The tax rate equals 100% of the amount by which the quarterly average price of West Texas Intermediate oil exceeds $75 per barrel, with inflation adjustments for years after 2026.
• "Covered taxpayers" are those averaging more than 100,000 barrels per day in extraction and imports (with aggregation rules for related entities).
• Gasoline Price Rebates (Section 3): Adds Section 6436, providing refundable tax credits to "eligible individuals" (U.S. residents who are not nonresident aliens, dependents, estates, or trusts). Credit amounts are determined by the Secretary based on tax revenues and the number of eligible individuals.
• Includes rules for U.S. possessions with mirror code tax systems and payments to other possessions.
• Requires outreach by the Secretary to inform taxpayers of eligibility.
• Iran War Gasoline Price Relief Fund (Section 4): Establishes a trust fund in the Treasury to receive tax revenues under Section 5896 and disburse amounts for rebates under Section 6436.

Significant Changes to Existing Law Introduced

• Creates new Chapter 56 in Subtitle E of the Internal Revenue Code for the windfall profits tax, including definitions, withholding rules, recordkeeping requirements, and regulatory authority.
• Introduces new Section 6436 in Subchapter B of Chapter 65 for the rebate credits, treating them as refundable under Subpart C of Part IV of Subchapter A of Chapter 1.
• Establishes new Section 9512 in Subchapter A of Chapter 98 for the dedicated trust fund.
• Amends Section 6211(b)(4)(A) and Title 31 of the U.S. Code to incorporate the new credit and fund into deficiency and payment procedures.
• The tax and rebates are time-limited, ending with the quarter in which the specified presidential declaration occurs.

Potential Impacts

• Government Agencies: The Internal Revenue Service would handle tax collection, returns, deposits, and regulations within 90 days of enactment. The Treasury Department would manage the trust fund, calculate rebates within 30 days after each quarter, and make payments to U.S. possessions.
• Citizens: Large oil producers and importers would face new tax liabilities on operations exceeding 100,000 barrels daily. Individual taxpayers could receive quarterly-based credits to reduce income tax liability or obtain refunds.
• International Relations: The tax's duration ties directly to U.S. presidential determinations on Iran-related hostilities and the Strait of Hormuz, potentially influencing energy markets and diplomatic efforts without altering existing trade or foreign policy statutes.

Main Stakeholders Affected

• Oil extraction and import companies meeting the volume thresholds.
• Individual U.S. taxpayers eligible for the rebates.
• The Internal Revenue Service and Department of the Treasury.
• U.S. territories and possessions receiving or distributing related payments.
• Oil consumers indirectly through potential price stabilization effects from rebates.

Notable Legal, Constitutional, or Political Implications

• The legislation delegates authority to the President to determine the end of the tax period based on specific factual declarations, which could raise questions about the scope of executive power in tax policy.
• It introduces a new excise tax structure modeled on historical windfall profit mechanisms but limited to crude oil and tied to geopolitical events.
• The rebate system creates a direct link between oil tax revenues and individual tax relief, with administrative provisions ensuring coordination across federal and possession-level tax systems.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Sherman, Brad [D-CA-32]

Recent Actions

• 2026-05-13: Referred to the House Committee on Ways and Means.
• 2026-05-13: Introduced in House
• 2026-05-13: Introduced in House

Bill Versions

• Iran War Oil Crisis Windfall Profits Tax Act — issued 2026-05-13 — PDF (13 pages)