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S5569119th CongressWALLET

Oil Company Windfall Profits Tax Act of 2026

Sponsored By: Senator Schiff, Adam B. [D-CA]

Introduced

Summary

This bill would impose a 50% fee on "excess" oil company profits and route most proceeds to transportation and cleanup trust funds. It creates a new excise fee in the tax code and a framework for computing, reporting, and transferring the money.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 2 benefits, 1 costs, 0 mixed.

Oil fee funds highways, transit, cleanup

This bill would direct portions of the new oil-fee receipts to national infrastructure and cleanup funds. It would treat amounts tied to the fee as covered receipts for Highway Trust Fund transfers and apply a 0.5435% rule for certain transfer calculations. It would also require an amount equal to 0.5435% of the fee to go to the Leaking Underground Storage Tank Trust Fund and would transfer 15.63% of the Highway Trust Fund amounts attributable to the fee to the Mass Transit Account.

Oil company fee becomes deductible

This bill would amend the tax code to allow integrated oil companies that pay the section 5896 fee to deduct that fee under the general deduction rule in section 164(a). If enacted, allowing the fee as a deduction would lower taxable income for payers and so would reduce their federal income tax liability compared with a non-deductible fee.

Higher fee on big oil profits

This bill would impose a new excise fee equal to 50% of an "excess profit" for integrated oil companies for tax years beginning after December 31, 2025. Excess profit would be the company’s adjusted taxable income for the year minus a "reasonably inflated average profit," which is the 5-year average (starting after Dec 31, 2020) with the single highest year dropped, plus 10% of that average. Adjusted taxable income would add back interest expense deductions, charitable contribution deductions, and net operating loss carryforwards; for foreign corporations it would apply to income effectively connected with a U.S. trade or business. Companies under common control would be treated as one person for the fee, and the Treasury Secretary would issue rules on withholding, returns, records, and other administration.

Sponsors & CoSponsors

Sponsor

Schiff, Adam B. [D-CA]

CA • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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