Federal gas tax suspended for 120 days under new House bill

What does this do?

HR 8795 would temporarily reduce the federal gas tax from about 18 cents per gallon on gasoline and about 24 cents per gallon on diesel to zero for 120 days after enactment. The president could extend the pause for an additional 90 days based on economic conditions. Fuel companies and retailers would be required to pass the savings to customers rather than retain them as profit, with the Treasury Department given authority to enforce that requirement.

Who does it affect?

The bill would most directly affect everyday drivers, truckers, and anyone who purchases gasoline, diesel, or kerosene during the suspension period. Fuel producers, distributors, and retailers would also be affected, as they would be expected to lower prices accordingly.

Why does it matter?

Removing the tax would reduce per-gallon costs for consumers during the suspension window, though the policy statement and enforcement mechanism would determine whether those savings actually reach the pump. The Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund would continue receiving their normal funding levels through Treasury transfers rather than tax receipts.

What does it cost, and who pays?

• Treasury backfills all lost tax revenue
• Highway Trust Fund kept whole
• Leaking Underground Storage Tank Fund kept whole