Federal diesel tax dropped to zero through end of 2026 under new House bill

What does this do?

HR 8772 would set the federal diesel fuel tax rate to zero from the date of enactment through January 1, 2027. The current federal tax on diesel is approximately 24 cents per gallon. The bill also suspends a separate fee that normally funds cleanup of leaking underground fuel storage tanks.

Who does it affect?

Industries that depend heavily on diesel, including trucking, farming, construction, and shipping, are the primary direct targets of the bill. Everyday consumers could be indirectly affected if reduced diesel costs lead to lower prices on goods transported by truck.

Why does it matter?

The bill includes non-binding language stating Congress intends for fuel sellers to pass savings to customers rather than retain them as profit, though no specific penalties are established for sellers who do not comply. The Treasury Department is given authority to enforce that goal, but enforcement mechanisms are not spelled out in the bill.

What does it cost, and who pays?

• Treasury backfills lost diesel tax revenue
• Highway Trust Fund kept whole
• No penalty amount specified