Bill would temporarily zero federal taxes on covered motor and aviation fuel

The bill would set the federal tax rate to zero for covered fuel and stop the related underground storage tank fee. It covers taxable motor and aviation fuel. Covered fuel is fuel that meets the definition in federal tax law. The Treasury would transfer money to three federal trust funds to make up for the reduced tax receipts. The zero rate would apply to covered fuel removed, entered, or sold on or after enactment and before October 1, 2027.

Fuel producers, dealers, and airline service providers would be expected to pass the tax reduction on to consumers; federal agencies would enforce the reduction and monitor fuel markets. This covers transportation motor fuel producers and dealers, aviation gasoline producers, airline service providers, and other dealers. Congress states that consumers should receive the savings immediately and that sellers should lower prices to reflect the tax reduction. The text says sellers who fail to pass on the reduction would face monetary penalties of at least the amount that should have been passed on. Consumers are meant to receive the tax reduction immediately while the temporary zero rate applies.