Gas Tax Suspension Act
- Bill Number
- S. 4485
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-05-11: Read twice and referred to the Committee on Finance.
- Last Updated
- 2026-06-05T18:24:03Z
AI-Generated Summary
Gas Tax Suspension Act (S. 4485)
Purpose
To temporarily suspend federal excise taxes on gasoline and diesel fuel (known as a "tax holiday") for up to 180 days, aiming to reduce fuel costs for consumers while ensuring related trust funds receive equivalent funding from general Treasury revenues.
Key Provisions
- Tax Suspension: Sets the tax rate to zero for gasoline and diesel fuel (defined as "taxable fuel" under existing tax code) that is removed from refineries, imported, or sold starting from the date of enactment until an "applicable date."
- Also suspends the additional rate funding the Leaking Underground Storage Tank (LUST) Trust Fund.
- Funding Replacement: The Secretary of the Treasury must transfer money from the general fund of the U.S. Treasury to:
- The Highway Trust Fund (for road and highway projects).
- The LUST Trust Fund (for cleaning up leaking fuel tanks).
- These transfers match the revenue lost from the tax suspension and are treated as if the taxes were collected.
- Duration:
- Starts immediately upon enactment.
- Ends 90 days later, or extends to 180 days if the President decides economic conditions (like high prices or recession) justify it.
Significant Changes to Existing Law
- Amends Section 4081 of the Internal Revenue Code (which sets fuel excise taxes at about 18.4 cents per gallon for gasoline and 24.4 cents for diesel).
- Temporarily eliminates these rates and the LUST fee (0.1 cents per gallon).
- Shifts funding for trust funds from direct fuel taxes to general taxpayer funds, preventing shortfalls in highway and environmental cleanup programs.
Potential Impacts
- Citizens and Businesses: Lower prices at gas stations, potentially saving drivers and industries (like trucking and farming) billions in fuel costs during the holiday.
- Government Agencies: Highway Trust Fund and LUST Trust Fund maintain full funding levels without service cuts; Treasury Department handles transfers, possibly straining general budget.
- Economy: Could ease inflation pressures from high fuel prices but increases federal spending from the general fund.
- No direct international relations impact noted.
Main Stakeholders Affected
- Consumers: Everyday drivers and households benefiting from cheaper fuel.
- Industries: Trucking, agriculture, manufacturing, and aviation (to a lesser extent) reliant on diesel/gasoline.
- Fuel Sector: Refiners, distributors, and retailers who collect and remit taxes.
- Government Entities: U.S. Treasury, Department of Transportation (via Highway Trust Fund), and Environmental Protection Agency (via LUST Fund).
Notable Legal, Constitutional, or Political Implications
- Legal: Relies on congressional authority over taxes (Article I, Section 8 of U.S. Constitution); President's extension discretion is broad but limited to economic factors.
- Fiscal: Replaces dedicated fuel taxes with general funds, potentially adding to the federal deficit without offsetting cuts or revenue elsewhere.
- Political: Provides short-term relief popular with voters but criticized for not addressing long-term infrastructure funding; sets precedent for using general funds to backstop trust funds during tax holidays.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2026-05-11: Read twice and referred to the Committee on Finance.
- 2026-05-11: Introduced in Senate
Bill Versions
- Gas Tax Suspension Act — issued 2026-05-11 — PDF (3 pages)