Gas Tax Suspension Act

Summary of Bill: S 4485 (Session 119) – A bill to amend the Internal Revenue Code of 1986 to provide a tax holiday for gasoline and diesel fuel

Purpose and intent

• The bill proposes to amend the Internal Revenue Code to establish a temporary tax holiday on gasoline and diesel fuel.
• The overarching goal is to reduce the after-tax cost of motor fuel for consumers and businesses for a defined period, through a suspension or reduction of applicable federal fuel taxes.

Key provisions and changes

• Tax holiday mechanism:
  • Repeals, suspends, or temporarily reduces federal excise taxes on gasoline and diesel fuel for a specified period.
  • The exact duration of the tax holiday (start and end dates) would be defined within the bill or via subsequent rules.
• Scope of fuels covered:
  • Applies to finalized gasoline and diesel sold for on-road use; potential treatment of alternative fuels would depend on bill text (not specified in the summary provided).
• Resourcing and revenue effects:
  • With the reduction/suspension of federal fuel taxes, projected federal revenue would decrease for the duration of the tax holiday.
  • The bill may include provisions addressing how the revenue shortfall would be offset (e.g., emergency funding measures, temporary borrowing, or explicit a lapse in other non-fuel taxes). The provided summary does not specify offset details.
• Implementation and administration:
  • Requires coordination with federal tax collection agencies to implement the temporary change.
  • Likely to include operational parameters, such as reporting, compliance, and enforcement related to the temporary relief.

Who would be affected

• Consumers: Potential reduction in the retail price of gasoline and diesel at the pump during the tax holiday period, providing immediate, short-term relief on fuel costs.
• Businesses: Industries reliant on on-road transportation (truckers, logistics, delivery, agriculture, and services with fleet operations) could see reduced fuel expenses during the holiday, impacting operating costs.
• Federal government: Reduced excise tax receipts for the duration of the holiday, affecting federal revenue planning and any programs funded by fuel taxes.
• Gas stations and distributors: May need to adjust pricing, tax calculation, and reporting systems to reflect temporary tax changes.

Procedural and timeline aspects

• Status: Introduced in the Senate and referred to the Committee on Finance (as of 2026-05-11).
• ** sponsorship**: Co-sponsored by Senator Josh Hawley.
• Next steps in process:
  • Committee consideration by the Senate Finance Committee.
  • Potential floor consideration, amendments, and, if passed, reconciliation with House measures or passage to the President for signature (depending on the legislative strategy and the broader budget/appropriations process).
• Effective date considerations: The bill would specify the effective date for the tax holiday and the termination date. Absent explicit language, the tax holiday would be temporary and tied to a defined window.

Notes and considerations

• The summary provided does not include exact dollar amounts, duration, or offset mechanisms. Those details are essential to assess fiscal impact, economic effects, and potential distributional consequences.
• The broader macroeconomic impact would depend on how long the tax holiday lasts and how price transmission occurs in retail markets, as well as any compensating measures adopted by the government.

If you’d like, I can tailor this summary to include hypothetical scenarios (e.g., 6-month vs. 12-month holidays, or different offset approaches) or search for the exact text to extract precise numbers and timelines.