Iran War Oil Windfall Tax

Summary#

This bill would add a new federal excise tax on crude oil and similar fuels during a period tied to hostilities with Iran. The tax applies to each barrel of taxable crude oil produced in the United States or entered into the United States for use. The tax amount per barrel equals the amount by which the West Texas Intermediate (WTI) oil price in the quarter exceeds $75 per barrel (the text calculates 100% of that excess amount). The tax stays in effect each calendar quarter until the President declares that (1) all hostilities with Iran have ceased, (2) the Strait of Hormuz is fully reopened, and (3) the WTI oil price per barrel falls below $75.

The bill defines covered taxpayers as firms that either produced and imported on average more than 100,000 barrels per day in 2025 or that exceed 100,000 barrels per day in a given calendar quarter. Taxable crude oil includes crude oil, condensates, natural gasoline, gasoline, and diesel. The Secretary of the Treasury must set withholding, deposit, recordkeeping, return, and regulatory rules and issue regulations within 90 days of enactment.

The bill creates the "Iran War Gasoline Price Relief Fund" in the Treasury and transfers the excise tax revenue into that fund. It then allows a refundable gasoline price rebate credit to eligible individuals. The Secretary will determine the rebate amount each quarter based on available fund revenues and the number of eligible individuals.

What it means for you#

  • Large oil producers and importers that meet the 100,000 barrels-per-day tests could owe an excise tax when quarterly WTI averages are over $75. The tax applies to domestic production removed from property and imports entered for use. Fractional barrels are prorated.
  • Individuals may receive refundable gasoline price rebates paid as a tax credit if they are eligible. Eligible individuals exclude nonresident aliens, people claimed as dependents, and estates or trusts. The Secretary will calculate each quarter’s rebate amount and timing.
  • The tax and rebate program include special rules for U.S. possessions: the Treasury will pay amounts to possessions with mirror code systems and estimated equivalents to other possessions that meet distribution conditions.
  • The tax ends only after the President makes three specific declarations about hostilities, the Strait of Hormuz, and the oil price.

Expenses#

  • The bill directs excise tax receipts from the windfall tax to the newly created Iran War Gasoline Price Relief Fund and authorizes those funds to be used to pay the gasoline price rebates.
  • The bill requires the Secretary to make payments to U.S. possessions to offset local impacts and to cover related administrative expenses when appropriate.
  • No publicly available information on estimated revenues, overall federal budget effects, or administrative costs is included in the bill text provided.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.