# Plain Language Summary: Federal Gas Tax Suspension and Windfall Profits Tax Act of 2022

This bill takes two main actions to address high gas prices. First, it temporarily eliminates the federal gas tax—the 18.4 cents per gallon that the government adds to every gallon of gasoline sold. This suspension would run from when the bill passes through the end of 2023. The idea is that this tax cut gets passed directly to consumers at the pump, so you'd pay less when you fill up. To make sure roads and bridges don't lose funding, the bill requires the government to replace the lost tax revenue from other sources so highway maintenance programs aren't affected.

Second, the bill creates a new tax on oil company profits. It targets large integrated oil companies (the major oil producers and refiners) and taxes 50 percent of their "excess profits." The bill defines excess profits as earnings above what these companies averaged during 2015-2019, plus an additional 10 percent cushion. So if an oil company is making significantly more money than it did in those pre-pandemic years, it pays a fee on the extra earnings. This tax is meant to capture windfall profits—the unusually high earnings companies make when prices spike due to events beyond normal market conditions.

The bill also includes technical provisions about refunds for fuel already in storage when the gas tax suspension takes effect, and a floor stocks tax that would kick in on January 1, 2024, to collect taxes on any remaining fuel inventory. The overall intent is to provide immediate relief at the gas pump for consumers while ensuring that oil companies' exceptional profits during high-price periods contribute additional revenue to offset the lost gas tax.

Federal Gas Tax Suspension and Windfall Profits Tax Act of 2022

Schiff, Adam B.

Federal Gas Tax Suspension and Windfall Profits Tax Act of 2022 This bill suspends the excise tax on gasoline (other than aviation gasoline) until December 31, 2023. It also imposes a 50% tax on the excess profits of certain large oil companies in the first taxable year after 2021.