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HR 8350

To amend the Internal Revenue Code of 1986 to allow the deduction of taxes and State-mandated surcharges included on gas or electric utility bills.

119th Congress Introduced by Jeff Van Drew and 1 co-sponsor

The bill would let itemizers deduct state taxes and surcharges included on gas and electric bills from federal taxable income.

Introduced in House
0
WeVote Research Nonpartisan
Bill Summary · HR 8350

Summary of HR 8350 (119th Congress)

Title

To amend the Internal Revenue Code of 1986 to allow the deduction of taxes and State-mandated surcharges included on gas or electric utility bills.

Purpose and Intent

  • The bill seeks to allow individual and/or business taxpayers to deduct amounts that are taxes or state-mandated surcharges charged on their gas and electric utility bills.
  • The underlying intent appears to be reducing the after-tax cost burden of utility-related charges by providing a deduction against federal income tax, aligning treatment with other deductible taxes or surcharges.

Key Provisions

  • Tax Deduction Eligibility: The bill would create or expand a deduction under the Internal Revenue Code for taxes and surcharges imposed by states (and potentially other jurisdictions) that are included on consumers’ gas and electric utility bills.
  • Scope of Charges: The deduction would apply specifically to charges labeled as taxes or state-mandated surcharges that appear on utility bills for natural gas and electricity.
  • Taxpayer Type: The deduction would be available to taxpayers who itemize deductions on their federal income tax returns (subject to the existing limitations and thresholds for itemized deductions under current law).
  • Interaction with Existing Provisions: The proposal would function as an adjustment to the federal tax code, potentially altering the net income tax liability by allowing deductions for these specific utility-related charges.

Note: The text provided does not specify numeric deduction amounts, phase-in or sunset provisions, or explicit interaction with alternative minimum tax (AMT) rules. If enacted, the bill’s final language would determine any such details.

Who Would Be Affected

  • Individual Taxpayers: Households paying state taxes or surcharges on their gas and electric bills that are deductible under the proposed provision.
  • Business Taxpayers: If the deduction structure permits, businesses that itemize deductions could also benefit similarly from these charges.
  • States and Jurisdictions: States imposing such surcharges could influence the overall federal tax outcomes for residents, indirectly affecting the perceived tax burden.

Procedural and Timeline Aspects

  • Introduction Date: 2026-04-16
  • Referral: Referred to the House Committee on Ways and Means (the committee with jurisdiction over tax policy and the Internal Revenue Code).
  • Sponsors:
    • Co-sponsors: Josh Riley, Jeff Van Drew
  • Next Steps in Legislative Process:
    • The committee may consider, amend, and report the bill to the full House.
    • If reported, the bill would proceed to floor consideration, potential amendments, and votes in the House.
    • If passed by the House, it would move to the Senate (and vice versa for any parallel or companion bills).

Potential Impacts and Considerations

  • Tax Burden Reduction: If enacted, taxpayers could reduce their federal taxable income by the amount of deductible utility taxes and surcharges, subject to itemization and other existing limitations.
  • Revenue Implications: The federal government could see a reduction in federal tax revenue corresponding to the value of the eligible deductions, depending on uptake and interaction with other tax provisions.
  • Administrative Considerations: IRS guidance would be needed to define eligible charges, determine documentation requirements, and handle any exceptions or audits.

If you’d like, I can tailor this summary to focus on particular audiences (e.g., policymakers, taxpayers, or utility customers) or add a comparison to existing deduction rules for taxes and surcharges.

Compiled from official sources — confirm details with the bill’s official record.

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