SB4032, the Gas Prices Relief Act of 2026, would create a temporary federal gasoline tax holiday for gasoline removed, entered, or sold from enactment through September 30, 2026. During that period, the federal excise tax on gasoline under Internal Revenue Code section 4081(a)(2)(A)(i) would be set to zero, and the Leaking Underground Storage Tank Trust Fund financing rate would also be suspended for gasoline covered by the holiday.
To offset the loss of dedicated fuel-tax revenue, the bill directs the Secretary of the Treasury to transfer amounts from the general fund to the Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund equal to the forgone receipts. It also includes a policy statement that the tax reduction should be passed through to consumers immediately, and authorizes Treasury to use its enforcement powers to ensure fuel producers and dealers reduce prices accordingly, including monetary penalties for failing to pass along the benefit.
Impact
The bill would temporarily amend the Internal Revenue Code by suspending the federal gasoline excise tax and related trust fund financing rate for the remainder of 2026. It would also require corresponding general-fund transfers to the Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund so those programs are held harmless from the tax holiday. The measure would directly affect gasoline producers, refiners, wholesalers, retailers, and consumers, while also implicating federal transportation and environmental trust fund financing.
Sentiment
Based on the bill text and the available legislative context, the measure appears to be framed as consumer relief legislation aimed at lowering fuel prices. The title and findings language suggest a strongly pro-consumer intent, with emphasis on immediate price reductions at the pump. No committee debate or recorded votes are provided, so there is no documented opposition or support beyond the sponsors’ stated purpose.
Contention
The main point of contention is likely the tradeoff between short-term consumer relief and the fiscal and programmatic effects of suspending a major fuel tax. Although the bill protects the Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund through general-fund transfers, critics could question whether the pass-through requirement is enforceable in practice and whether fuel sellers would actually reduce prices by the full amount of the tax cut. Another likely issue is whether a temporary tax holiday is an effective way to address gasoline prices compared with other policy tools.
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.