H.R. 7960 — Big Oil Windfall Profits Tax Act

This section establishes a new excise tax on windfall profits from taxable crude oil (i.e., crude oil, crude oil condensates, and natural gasoline), imposed on covered taxpayers (i.e., those averaging more than 300,000 barrels per day—42 U.S. gallons—of taxable crude oil extracted and imported in calendar year 2025 or the relevant calendar quarter, with aggregation rules under IRC §§52 and 414). The tax applies to each barrel of taxable crude oil extracted in the United States and removed or entered into the United States for consumption, use, or warehousing, at a rate equal to 50% of the excess (if any) of the average quarterly price of Brent crude oil over the average price of Brent crude oil for calendar year 2025 (inflation-adjusted for quarters in taxable years after 2026 using the cost-of-living adjustment under IRC §1(f)(3), with 2025 substituted for 2016 and rounding to the nearest $0.01). The amendments apply to crude oil removed or entered in calendar quarters after December 31, 2025, but for quarters ending before July 1, 2026, the tax is not due before September 30, 2026.

This section establishes a new refundable tax credit under IRC §6436 for eligible individuals (i.e., individuals other than nonresident aliens, dependents, estates, or trusts) for taxable years beginning after December 31, 2025, equal to the sum of quarterly gasoline price rebate amounts determined by the Treasury Secretary no later than 30 days after each calendar quarter based on the number of eligible individuals and revenues from the tax imposed by §5896 deposited in the Protect Consumers from Gas Hikes Fund for the prior quarter. For joint returns, the rebate amount is 150% of the base amount, reduced (but not below zero) by 5% of adjusted gross income exceeding $150,000 ($112,500 for heads of household; $75,000 for others); requires valid Social Security numbers on returns (with reduced amounts or zero for incomplete joint returns, except for military spouses); treats the credit as refundable; and directs the Secretary to issue regulations and conduct outreach. This section further requires the Treasury Secretary to make equivalent payments to U.S. possessions (including for administrative costs), mirroring benefits under a mirror code system or estimated for others with an approved distribution plan.

This section establishes the Protect Consumers from Gas Price Hikes Fund as a trust fund in the Treasury, to which amounts equivalent to taxes received under section 5896 are appropriated (in addition to amounts credited under section 9602(b)). The Secretary must transfer from the fund to the general fund of the Treasury amounts equal to refunds payable under section 6436. (Thus, the fund reimburses the general fund for such refunds.)