I 

109TH CONGRESS 

2D SESSION H. R. 5240 

To amend the Internal Revenue Code of 1986 to suspend the excise tax 

on highway motor fuels when average United States retail gasoline prices 

exceed $2.75 per gallon. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 27, 2006 

Mr. MCHUGH introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to suspend 

the excise tax on highway motor fuels when average 

United States retail gasoline prices exceed $2.75 per 

gallon. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Gasoline Tax Relief 

5 Act of 2006’’. 


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1 SEC. 2. SUSPENSION OF FUEL TAXES ON HIGHWAY MOTOR 

2 FUELS WHEN WEEKLY UNITED STATES RE3 TAIL GASOLINE PRICES EXCEED BENCH4 MARK. 

5 (a) IN GENERAL.—Section 4081 of the Internal Rev6 enue Code of 1986 (relating to imposition of tax on motor 

7 and aviation fuels) is amended by adding at the end the 

8 following new subsection: 

9 ‘‘(f) SUSPENSION OF HIGHWAY MOTOR FUEL TAXES

10 WHEN RETAIL GASOLINE EXCEEDS BENCHMARK.— 

11 ‘‘(1) IN GENERAL.—During any suspension pe12 riod, the tax imposed by section 4041 or 4081 on 

13 highway motor fuel shall be suspended. 

14 ‘‘(2) DEFINITIONS.—For purposes of this sub15 section— 

16 ‘‘(A) SUSPENSION PERIOD.—The term 

17 ‘suspension period’ means— 

18 ‘‘(i) the 60-day period beginning 7 

19 days after the date of enactment of this 

20 subsection, and 

21 ‘‘(ii) after such 60-day period, any pe22 riod— 

23 ‘‘(I) beginning 7 days after the 

24 date on which the weekly United 

25 States retail gasoline price for regular 

26 grade conventional areas (as published 


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1 by the Energy Information Adminis2 tration, Department of Energy), inclu3 sive of such tax, is greater than the 

4 benchmark price, and 

5 ‘‘(II) ending 7 days after the 

6 date on which such price (as so pub7 lished), without regard to this sub8 section, does not exceed the bench9 mark price. 

10 ‘‘(B) BENCHMARK PRICE.—For purposes 

11 of this subsection— 

12 ‘‘(i) IN GENERAL.—The term ‘bench13 mark price’ means $2.75 per gallon. 

14 ‘‘(ii) ADJUSTMENT FOR INFLATION.— 

15 In the case of any calendar year beginning 

16 after 2006, the dollar amount in clause (i) 

17 shall be increased by an amount equal to— 

18 ‘‘(I) such dollar amount, multi19 plied by 

20 ‘‘(II) the cost-of-living adjust21 ment determined under section 1(f)(3) 

22 for such calendar year, determined by 

23 substituting ‘calendar year 2005’ for 

24 ‘calendar year 1992’ in subparagraph 

25 (B) thereof. 


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1 Any increase determined under subclause 

2 (II) shall be rounded to the nearest cent. 

3 ‘‘(C) HIGHWAY MOTOR FUEL.—The term 

4 ‘highway motor fuel’ means any fuel subject to 

5 tax under section 4041 or 4081 other than 

6 aviation gasoline and aviation-grade kerosene.’’. 

7 (b) MAINTENANCE OF TRUST FUNDS DEPOSITS; 

8 AMOUNTS APPROPRIATED TO TRUST FUNDS TREATED AS

9 TAXES.— 

10 (1) IN GENERAL.—There is hereby appro11 priated (out of any money in the Treasury not other12 wise appropriated) to each trust fund which would 

13 (but for this subsection) receive reduced revenues as 

14 a result of a suspension in a rate of tax by reason 

15 of section 4081(f)(1) of the Internal Revenue Code 

16 of 1986 (as added by this section) an amount equal 

17 to such reduction in revenues. Amounts appropriated 

18 by the preceding sentence to any trust fund— 

19 (A) shall be transferred from the general 

20 fund at such times and in such manner as to 

21 replicate to the extent possible the transfers 

22 which would have occurred had subsection (a) 

23 not been enacted, and 

24 (B) shall be treated for all purposes of 

25 Federal law as taxes received under the approVerDate Aug 31 2005 19:39 Apr 30, 2006 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5240.IH H5240

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1 priate section referred to in such section 

2 4081(f)(1). 

3 (c) EFFECTIVE DATE.—The amendment made by 

4 this section shall take effect on the date of the enactment 

5 of this Act. 

6 (d) FLOOR STOCK REFUNDS.— 

7 (1) IN GENERAL.—If— 

8 (A) before the tax suspension date, tax has 

9 been imposed under section 4081 of the Inter10 nal Revenue Code of 1986 on any highway 

11 motor fuel, and 

12 (B) on such date such fuel is held by a 

13 dealer and has not been used and is intended 

14 for sale, 

15 there shall be credited or refunded (without interest) 

16 to the person who paid such tax (hereafter in this 

17 subsection referred to as the ‘‘taxpayer’’) an amount 

18 equal to the excess of the tax paid by the taxpayer 

19 over the tax which would be imposed on such fuel 

20 had the taxable event occurred on such date. 

21 (2) TIME FOR FILING CLAIMS.—No credit or re22 fund shall be allowed or made under this subsection 

23 unless— 

24 (A) claim therefor is filed with the Sec25 retary of the Treasury before the date which is 


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1 6 months after the tax suspension date based 

2 on a request submitted to the taxpayer before 

3 the date which is 3 months after the tax sus4 pension date by the dealer who held the high5 way motor fuel on such date, and 

6 (B) the taxpayer has repaid or agreed to 

7 repay the amount so claimed to such dealer or 

8 has obtained the written consent of such dealer 

9 to the allowance of the credit or the making of 

10 the refund. 

11 (3) EXCEPTION FOR FUEL HELD IN RETAIL

12 STOCKS.—No credit or refund shall be allowed under 

13 this subsection with respect to any highway motor 

14 fuel in retail stocks held at the place where intended 

15 to be sold at retail. 

16 (4) DEFINITIONS.—For purposes of this sub17 section— 

18 (A) TAX SUSPENSION DATE.—The term 

19 ‘‘tax suspension date’’ means the first day of 

20 any suspension period in effect under section 

21 4081(f) of the Internal Revenue Code of 1986 

22 (as added by subsection (a) of this section). 

23 (B) OTHER TERMS.—The terms ‘‘dealer’’ 

24 and ‘‘held by a dealer’’ have the respective 


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1 meanings given to such terms by section 6412 

2 of such Code. 

3 (5) CERTAIN RULES TO APPLY.—Rules similar 

4 to the rules of subsections (b) and (c) of section 

5 6412 of such Code shall apply for purposes of this 

6 subsection. 

7 (e) FLOOR STOCKS TAX.— 

8 (1) IMPOSITION OF TAX.—In the case of any 

9 highway motor fuel which is held on the tax restora10 tion date by any person, there is hereby imposed a 

11 floor stocks tax equal to the excess of the tax which 

12 would be imposed on such fuel had the taxable event 

13 occurred on such date over the tax (if any) pre14 viously paid (and not credited or refunded) on such 

15 fuel. 

16 (2) LIABILITY FOR TAX AND METHOD OF PAY17 MENT.— 

18 (A) LIABILITY FOR TAX.—The person 

19 holding highway motor fuel on the tax restora20 tion date to which the tax imposed by para21 graph (1) applies shall be liable for such tax. 

22 (B) METHOD OF PAYMENT.—The tax im23 posed by paragraph (1) shall be paid in such 

24 manner as the Secretary shall prescribe. 


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1 (C) TIME FOR PAYMENT.—The tax im2 posed by paragraph (1) shall be paid on or be3 fore the 45th day after the tax restoration date. 

4 (3) DEFINITIONS.—For purposes of this sub5 section— 

6 (A) TAX RESTORATION DATE.—The term 

7 ‘‘tax restoration date’’ means the first day after 

8 the end of any suspension period (as defined in 

9 section 4081(f) of the Internal Revenue Code of 

10 1986). 

11 (B) HIGHWAY MOTOR FUEL.—The term 

12 ‘‘highway motor fuel’’ has the meaning given to 

13 such term by section 4081(f) of such Code. 

14 (C) HELD BY A PERSON.—A highway 

15 motor fuel shall be considered as held by a per16 son if title thereto has passed to such person 

17 (whether or not delivery to the person has been 

18 made). 

19 (D) SECRETARY.—The term ‘‘Secretary’’ 

20 means the Secretary of the Treasury or the 

21 Secretary’s delegate. 

22 (4) EXCEPTION FOR EXEMPT USES.—The tax 

23 imposed by paragraph (1) shall not apply to any 

24 highway motor fuel held by any person exclusively 


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1 for any use to the extent a credit or refund of the 

2 tax is allowable for such use. 

3 (5) EXCEPTION FOR CERTAIN AMOUNTS OF

4 FUEL.— 

5 (A) IN GENERAL.—No tax shall be im6 posed by paragraph (1) on any highway motor 

7 fuel held on the tax restoration date by any per8 son if the aggregate amount of such highway 

9 motor fuel held by such person on such date 

10 does not exceed 2,000 gallons. The preceding 

11 sentence shall apply only if such person submits 

12 to the Secretary (at the time and in the manner 

13 required by the Secretary) such information as 

14 the Secretary shall require for purposes of this 

15 subparagraph. 

16 (B) EXEMPT FUEL.—For purposes of sub17 paragraph (A), there shall not be taken into ac18 count any highway motor fuel held by any per19 son which is exempt from the tax imposed by 

20 paragraph (1) by reason of paragraph (4). 

21 (C) CONTROLLED GROUPS.—For purposes 

22 of this subsection— 

23 (i) CORPORATIONS.— 


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1 (I) IN GENERAL.—All persons 

2 treated as a controlled group shall be 

3 treated as 1 person. 

4 (II) CONTROLLED GROUP.—The 

5 term ‘‘controlled group’’ has the 

6 meaning given to such term by sub7 section (a) of section 1563 of such 

8 Code; except that for such purposes 

9 the phrase ‘‘more than 50 percent’’ 

10 shall be substituted for the phrase ‘‘at 

11 least 80 percent’’ each place it ap12 pears in such subsection. 

13 (ii) NONINCORPORATED PERSONS

14 UNDER COMMON CONTROL.—Under regula15 tions prescribed by the Secretary, prin16 ciples similar to the principles of subpara17 graph (A) shall apply to a group of per18 sons under common control if 1 or more of 

19 such persons is not a corporation. 

20 (6) OTHER LAWS APPLICABLE.—All provisions 

21 of law, including penalties, applicable with respect to 

22 the taxes imposed by section 4081 of such Code 

23 shall, insofar as applicable and not inconsistent with 

24 the provisions of this subsection, apply with respect 

25 to the floor stock taxes imposed by paragraph (1) to 


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1 the same extent as if such taxes were imposed by 

2 such section. 

Æ 


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