Republican lawmakers have introduced proposals in the House and Senate to temporarily suspend the federal excise tax on gasoline and diesel fuel, a move publicly supported by President Donald Trump amid rising fuel prices. The proposals follow Democrat bills calling for a gas tax holiday, but differ in their timeline and scope.
Senate Bill Offers 90-Day Suspension
On May 11, Senator Josh Hawley (R-MO) introduced the Gas Tax Suspension Act, S. 4485, to reduce the tax rate on non-aviation gasoline and diesel fuel to zero. The bill would do so by amending IRC § 4081(a)(2)(A). The move would pause the 18.4-cents-per-gallon tax on gasoline and the 24.4-cents-per-gallon tax on diesel fuel.
Hawley’s bill would suspend the federal gas tax for at least 90 days. It also would give the president authority to extend the suspension for an additional 90 days if “economic conditions” warrant it.
Hawley cites the national average prices for regular gasoline and diesel fuel — over $4.50 per gallon and nearly $5.70 per gallon, respectively — as the reason for his proposal.
House Proposal Calls for Longer Suspension
Meanwhile, Representative Jeff Van Drew (R-NJ), announced the same day that he is introducing a similar bill to suspend the federal gas tax. Like the Senate bill, the Van Drew’s bill would suspend federal fuel taxes on gasoline and diesel fuel. Van Drew, however, is also calling for suspension of the federal gas tax on aviation gasoline, per a press release.
Van Drew proposes a longer tax relief period of 18 months. After the 18-month holiday, the taxes would be gradually phased back in.
Van Drew is also urging states to consider similar suspensions to their gas taxes. He notes that in his home state of New Jersey, state gas taxes amount to about 49 cents per gallon.
Gas tax rates range widely among states, per a 2025 Tax Foundation analysis. In 2025, Alaska had a rate of just 8.95 cents per gallon, while the rate in California was 70.92 cents per gallon.
Democrat Proposals
Van Drew’s proposal is not the first congressional proposal since the onset of the war in Iran to call for gas tax relief. A month ago, Representative Brendan Boyle (D-PA) introduced H.R. 8600, which calls for a partial suspension of the gas tax, triggered in months where the national average price of gasoline exceeds $3.99 per gallon.
And Senator Mark Kelly (D-AZ) called for a gasoline tax holiday back in March, just after the war in Iran began. Kelly’s bill, the Gas Prices Relief Act, S. 4032, would suspend federal tax on gasoline, under IRC § 4081(a)(2)(A)(i), until October 1, 2026.
A House companion bill, H.R. 7919, was introduced by Representative Chris Pappas (D-NH) days after Kelly’s bill.
Trump Throws Support Behind Gas Tax Holiday
President Trump on May 11 said he backs reducing the federal gasoline tax as U.S. fuel prices rise. When asked if he would suspend the tax, Trump said, “Yeah, I’m going to reduce,” Reuters reports. Trump added that he would suspend the tax “till it’s appropriate.”
Hawley notes that his proposal aligns with the Trump administration’s sentiment. “President Trump has proposed to suspend the federal gas tax and he’s exactly right,” said Hawley in a statement.
Highway Trust Fund Impacts
Some experts, however, are urging caution in suspending the gas tax due to impacts on funding for highway construction and maintenance. Revenue from federal gas taxes comprise about 85% of the Highway Trust Fund highway account’s annual revenue, per a 2025 Congressional Research Service report.
The highway account has been struggling for years, with expenditures exceeding revenues since 2001, says the CRS. Congress has responded via multiple transfers from Treasury’s General Fund to the highway account, the CRS explains, but it has not addressed the underlying revenue-to-expenditures mismatch.
Hawley’s proposal would require the Treasury Secretary to transfer money from the general fund to the Highway Trust Fund during the gas tax suspension period to address the shortfall. The transfers would be in amounts equal to the revenue lost from the tax suspension. Kelly’s proposal takes a similar approach in calling for general fund transfers.
Boyle’s bill, however, would keep the highway account funded during the tax suspension period by going after oil and gas subsidies, per a press release. Specifically, it would pause the IRC § 43 enhanced oil recovery credit and IRC § 45I(d) marginal well credit for months during which the gas tax is suspended.
Details on Van Drew’s approach to maintaining support for the Highway Trust Fund were not available at press time.
Addressing an Ongoing Shortfall
Beyond Highway Trust Fund impacts of the congressional and Trump administration proposals, policy experts have weighed in on options to address the underlying highway account shortfall.
One option, says the Tax Policy Center, is to increase the federal tax rate on gasoline and diesel fuel — a move opposite to recent proposals. Another, the group explains, is to “abandon the user-pay principle and simply pay for highways through general revenues.”
The National Taxpayers Union offers other approaches in a May 12 letter, including expanding U.S. fuel production via permitting reform and increased drilling on federal land and waters. The group also recommends “a better financing mechanism” for the Highway Trust Fund.
States similarly use their gas taxes to fund roadway construction and maintenance, the Tax Foundation explains. However, with the rise of electric vehicles and increasing fuel efficiency, the group contends that “the gas tax becomes a worse proxy for the price of roads.”
As a result, some states are taking alternative approaches to raising revenue for roadways, says the Tax Foundation. That includes imposing fees on electric vehicles — because drivers of these vehicles don’t pay the gas tax. Another option considered by states is a vehicle-miles-traveled tax, the group explains, which would charge drivers by the mile rather than per gallon of gas.
For more on the current federal gas tax, see Checkpoint’s Federal Tax Coordinator 2d ¶ W-1501.
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