S. 4032 – Gas Prices Relief Act of 2026

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Updated March 21, 2026 at 4:20 AM UTC

The Gas Prices Relief Act of 2026 temporarily eliminates the federal gasoline excise tax. From the date the law takes effect until October 1, 2026, gasoline sold in the United States will not be subject to the standard tax, and the additional financing rate for the Leaking Underground Storage Tank Trust Fund will also be suspended. The Treasury will move the lost tax revenue into the Highway Trust Fund and the LUST Trust Fund, and the bill requires that the tax savings be passed on to consumers, with penalties for dealers who fail to lower prices.

Key Provisions

Sets the federal gasoline tax to zero for gasoline sold after enactment and before October 1 2026.
Suspends the Leaking Underground Storage Tank (LUST) Trust Fund financing rate for the same period.
Requires the Treasury to transfer the amount of lost tax revenue to the Highway Trust Fund and the LUST Trust Fund as an offset.
Mandates that the tax reduction be reflected in lower pump prices for consumers, and imposes monetary penalties on fuel producers or dealers who do not pass on the savings.

Legislative Activity

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1 earlier action

SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

Finance Committee

March 9, 2026

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SenateIntro Referral

Introduced in Senate

March 9, 2026

SenateIntro Referral

Read twice and referred to the Committee on Finance.

Finance Committee

March 9, 2026

Bill Text

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Introduced in SenateIssued March 9, 2026

II

119th CONGRESS

2d Session

S. 4032

IN THE SENATE OF THE UNITED STATES

March 9, 2026

Mr. Kelly (for himself and Mr. Blumenthal) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

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

1.

Short title

This Act may be cited as the Gas Prices Relief Act of 2026.

2.

2026 gasoline tax holiday

(a)

In general

In the case of gasoline removed, entered, or sold on or after the date of the enactment of this Act and before October 1, 2026—

(1)

the rate of tax under section 4081(a)(2)(A)(i) of the Internal Revenue Code of 1986 shall be zero, and

(2)

the Leaking Underground Storage Tank Trust Fund financing rate under section 4081(a)(2)(B) of such Code shall not apply to gasoline to which the rate under paragraph (1) applies.

(b)

Transfers to Trust Fund

(1)

In general

The Secretary of the Treasury shall transfer from the general fund to the Highway Trust Fund established under section 9503(a) of the Internal Revenue Code of 1986 and the Leaking Underground Storage Tank Trust Fund established under section 9508(a) of such Code amounts equal to the reduction in amounts credited (but for this subsection) to each such Trust Fund by reason of subsection (a).

(2)

Coordination rules

(A)

Leaking Underground Storage Tank Trust Fund

Amounts transferred to the Leaking Underground Storage Tank Trust Fund under paragraph (1) shall be treated for purposes of sections 9503(b)(1) and 9508(b)(2) of such Code as taxes received in the Treasury under section 4081 of such Code attributable to the Leaking Underground Storage Tank Trust Fund financing rate.

(B)

Highway Trust Fund

Amounts transferred to the Highway Trust Fund under paragraph (1) shall be treated for purposes of section 9503(b)(1) of such Code as taxes received in the Treasury under section 4081 of such Code which are not attributable to the Leaking Underground Storage Tank Trust Fund financing rate.

(c)

Benefits of tax reduction should be passed on to consumers

(1)

It is the policy of Congress that—

(A)

consumers immediately receive the benefit of the reduction in taxes resulting from the application of subsection (a),

(B)

transportation motor fuels producers and other dealers take such actions as necessary to reduce transportation motor fuels prices to reflect such reduction, and

(C)

transportation motor fuels producers and other dealers that fail to reduce transportation motor fuels prices to reflect such reduction shall be subject to monetary penalties which are not less than the amount of the reduction in taxes which should have been passed on to consumers.

(2)

Enforcement

The Secretary of the Treasury shall use all applicable authorities to ensure that the benefit of the reduction in taxes resulting from the application of subsection (a) is received by consumers.