Federal Gas Tax Drops to Zero Through 2025: Treasury Must Enforce Price Cuts at the Pump

The newly proposed Gas Prices Relief Act of 2025 is straightforward: it hits the pause button on the federal gasoline tax. Specifically, from the day this bill becomes law until December 31, 2025, the standard federal tax on gasoline, which includes the separate tax for the Leaking Underground Storage Tank Trust Fund (LUST), drops to zero. If you’re filling up your tank, this is money that, in theory, should come right back to your wallet.

The Instant Savings vs. Infrastructure Funding

When you buy gas, a chunk of that money usually goes to the federal Highway Trust Fund (HTF), which pays for roads, bridges, and mass transit projects. This bill suspends that dedicated funding stream for a year. However, the bill includes a critical safeguard: the Secretary of the Treasury must transfer an equivalent amount of money from the general fund—the pot of money funded by income taxes and other federal revenue—to the HTF and the LUST Trust Fund. This means infrastructure funding is theoretically protected, but it shifts the cost from a user fee (the gas tax) to the general taxpayer.

The Consumer Pass-Through Problem

This is where the bill gets interesting—and potentially thorny. Congress is explicit: the entire point of this tax holiday is for consumers to see the savings immediately at the pump. The bill states that producers and sellers must quickly lower their prices to reflect the tax savings. To ensure this actually happens, the Secretary of the Treasury is authorized to use “all available legal tools to enforce” that consumers get the benefit.

Think about that for a second. The Treasury Department, which usually handles taxes and finances, is now being told to act like a price regulator for gas stations and distributors. For a busy person, this is the most important part of the bill. If you don't see the price drop, the whole exercise is just moving money around in Washington. But granting the Treasury such broad, undefined authority to enforce price compliance is a huge, vague power grab. What tools are 'available'? Fines? Audits? This provision gives the Secretary a lot of latitude with very little detail on how they're supposed to police thousands of gas stations nationwide.

Who Pays the Tab?

If this bill passes, you get a break at the pump, which is great if you drive a lot for work or family. But remember that money for the HTF still has to come from somewhere. By requiring the Treasury to backfill the HTF and LUST funds from the general fund, the bill essentially transfers the cost from drivers (via the gas tax) to all taxpayers (via the general fund). So, while you save money on your commute, the bill is effectively using general tax revenue to subsidize infrastructure spending for the year. It’s a classic trade-off: immediate, visible relief now, funded by a less visible shift in the federal budget later.