Suspension of fuel taxes on highway motor fuels when weekly United States retail gasoline prices exceed benchmark

(a)

In general

Section 4081 of the Internal Revenue Code of 1986 (relating to imposition of tax on motor and aviation fuels) is amended by adding at the end the following new subsection:

(f)

Suspension of highway motor fuel taxes when retail gasoline exceeds benchmark

(1)

In general

During any suspension period, the tax imposed by section 4041 or 4081 on highway motor fuel shall be suspended. (2)

Definitions

For purposes of this subsection— (A)

Suspension period

The term suspension period means— (i)the 60-day period beginning 7 days after the date of enactment of this subsection, and (ii)after such 60-day period, any period— (I)beginning 7 days after the date on which the weekly United States retail gasoline price for regular grade conventional areas (as published by the Energy Information Administration, Department of Energy), inclusive of such tax, is greater than the benchmark price, and (II)ending 7 days after the date on which such price (as so published), without regard to this subsection, does not exceed the benchmark price. (B)

Benchmark price

For purposes of this subsection— (i)

In general

The term benchmark price means $2.75 per gallon. (ii)

Adjustment for inflation

In the case of any calendar year beginning after 2006, the dollar amount in clause (i) shall be increased by an amount equal to— (I)such dollar amount, multiplied by (II)the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting calendar year 2005 for calendar year 1992 in subparagraph (B) thereof.

Any increase determined under subclause (II) shall be rounded to the nearest cent.

(C)

Highway motor fuel

The term highway motor fuel means any fuel subject to tax under section 4041 or 4081 other than aviation gasoline and aviation-grade kerosene.

(b)

Maintenance of trust funds deposits; amounts appropriated to trust funds treated as taxes

(1)

In general

There is hereby appropriated (out of any money in the Treasury not otherwise appropriated) to each trust fund which would (but for this subsection) receive reduced revenues as a result of a suspension in a rate of tax by reason of section 4081(f)(1) of the Internal Revenue Code of 1986 (as added by this section) an amount equal to such reduction in revenues. Amounts appropriated by the preceding sentence to any trust fund— (A)shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred had subsection (a) not been enacted, and (B)shall be treated for all purposes of Federal law as taxes received under the appropriate section referred to in such section 4081(f)(1). (c)

Effective date

The amendment made by this section shall take effect on the date of the enactment of this Act. (d)

Floor stock refunds

(1)

In general

If— (A)before the tax suspension date, tax has been imposed under section 4081 of the Internal Revenue Code of 1986 on any highway motor fuel, and (B)on such date such fuel is held by a dealer and has not been used and is intended for sale,

there shall be credited or refunded (without interest) to the person who paid such tax (hereafter in this subsection referred to as the taxpayer) an amount equal to the excess of the tax paid by the taxpayer over the tax which would be imposed on such fuel had the taxable event occurred on such date.

(2)

Time for filing claims

No credit or refund shall be allowed or made under this subsection unless— (A)claim therefor is filed with the Secretary of the Treasury before the date which is 6 months after the tax suspension date based on a request submitted to the taxpayer before the date which is 3 months after the tax suspension date by the dealer who held the highway motor fuel on such date, and (B)the taxpayer has repaid or agreed to repay the amount so claimed to such dealer or has obtained the written consent of such dealer to the allowance of the credit or the making of the refund. (3)

Exception for fuel held in retail stocks

No credit or refund shall be allowed under this subsection with respect to any highway motor fuel in retail stocks held at the place where intended to be sold at retail. (4)

Definitions

For purposes of this subsection— (A)

Tax suspension date

The term tax suspension date means the first day of any suspension period in effect under section 4081(f) of the Internal Revenue Code of 1986 (as added by subsection (a) of this section). (B)

Other terms

The terms dealer and held by a dealer have the respective meanings given to such terms by section 6412 of such Code. (5)

Certain rules to apply

Rules similar to the rules of subsections (b) and (c) of section 6412 of such Code shall apply for purposes of this subsection. (e)

Floor stocks tax

(1)

Imposition of tax

In the case of any highway motor fuel which is held on the tax restoration date by any person, there is hereby imposed a floor stocks tax equal to the excess of the tax which would be imposed on such fuel had the taxable event occurred on such date over the tax (if any) previously paid (and not credited or refunded) on such fuel. (2)

Liability for tax and method of payment

(A)

Liability for tax

The person holding highway motor fuel on the tax restoration date to which the tax imposed by paragraph (1) applies shall be liable for such tax. (B)

Method of payment

The tax imposed by paragraph (1) shall be paid in such manner as the Secretary shall prescribe. (C)

Time for payment

The tax imposed by paragraph (1) shall be paid on or before the 45th day after the tax restoration date. (3)

Definitions

For purposes of this subsection— (A)

Tax restoration date

The term tax restoration date means the first day after the end of any suspension period (as defined in section 4081(f) of the Internal Revenue Code of 1986). (B)

Highway motor fuel

The term highway motor fuel has the meaning given to such term by section 4081(f) of such Code. (C)

Held by a person

A highway motor fuel shall be considered as held by a person if title thereto has passed to such person (whether or not delivery to the person has been made). (D)

Secretary

The term Secretary means the Secretary of the Treasury or the Secretary’s delegate. (4)

Exception for exempt uses

The tax imposed by paragraph (1) shall not apply to any highway motor fuel held by any person exclusively for any use to the extent a credit or refund of the tax is allowable for such use. (5)

Exception for certain amounts of fuel

(A)

In general

No tax shall be imposed by paragraph (1) on any highway motor fuel held on the tax restoration date by any person if the aggregate amount of such highway motor fuel held by such person on such date does not exceed 2,000 gallons. The preceding sentence shall apply only if such person submits to the Secretary (at the time and in the manner required by the Secretary) such information as the Secretary shall require for purposes of this subparagraph. (B)

Exempt fuel

For purposes of subparagraph (A), there shall not be taken into account any highway motor fuel held by any person which is exempt from the tax imposed by paragraph (1) by reason of paragraph (4). (C)

Controlled groups

For purposes of this subsection— (i)

Corporations

(I)

In general

All persons treated as a controlled group shall be treated as 1 person. (II)

Controlled group

The term controlled group has the meaning given to such term by subsection (a) of section 1563 of such Code; except that for such purposes the phrase more than 50 percent shall be substituted for the phrase at least 80 percent each place it appears in such subsection. (ii)

Nonincorporated persons under common control

Under regulations prescribed by the Secretary, principles similar to the principles of subparagraph (A) shall apply to a group of persons under common control if 1 or more of such persons is not a corporation. (6)

Other laws applicable

All provisions of law, including penalties, applicable with respect to the taxes imposed by section 4081 of such Code shall, insofar as applicable and not inconsistent with the provisions of this subsection, apply with respect to the floor stock taxes imposed by paragraph (1) to the same extent as if such taxes were imposed by such section.