A bill to amend the Internal Revenue Code of 1986 to provide a gasoline tax holiday.

This bill, the "Gas Prices Relief Act of 2026," establishes a federal gasoline tax holiday from its enactment until October 1, 2026. During this period, the federal excise tax of 18.4 cents per gallon on gasoline and the 0.1 cent per gallon Leaking Underground Storage Tank Trust Fund financing rate will be zero. This directly reduces the cost of gasoline at the pump for consumers. The U.S. Treasury will transfer funds from the general fund to the Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund to offset the lost tax revenue, ensuring that infrastructure projects funded by these trusts are not impacted. The bill explicitly states that consumers must immediately receive the benefit of this tax reduction. It mandates that transportation motor fuels producers and other dealers reduce prices to reflect the tax holiday. Non-compliance will result in monetary penalties equal to the unpassed savings. This provision aims to prevent energy companies from absorbing the tax reduction as increased profit margins, directly benefiting consumers. Historically, gasoline tax holidays have been proposed but rarely enacted at the federal level. During the 2008 presidential campaign, a federal gas tax holiday was discussed but did not pass. State-level gas tax holidays have occurred; for example, Maryland implemented a 30-day gas tax holiday in March 2022, and Florida enacted a one-month gas tax holiday in October 2022. In both cases, initial reports indicated that a significant portion, though not always 100%, of the tax savings was passed on to consumers, leading to a temporary decrease in pump prices. The market reaction to these state-level actions was localized and generally muted for national energy companies. Specific winners are consumers, who will see lower gasoline prices. Companies in the Energy sector, including major integrated oil and gas companies like Exxon Mobil ($XOM), Chevron ($CVX), Shell ($SHEL), and BP ($BP), as well as refiners like Marathon Petroleum ($MPC), Phillips 66 ($PSX), and Valero Energy ($VLO), are directly affected by the mandate to reduce prices. While the tax holiday reduces their cost of goods sold (the tax itself), the explicit requirement to pass savings to consumers means their profit margins on gasoline sales will not increase due to this specific tax change. Companies in the Transportation sector, such as Tesla ($TSLA), General Motors ($GM), and Ford ($F), benefit indirectly as lower fuel costs can stimulate consumer spending and travel, potentially increasing demand for vehicles. The timeline for this bill is immediate upon enactment, lasting until October 1, 2026. The next step is consideration by the Senate Committee on Finance.