S. 4111 — Big Oil Windfall Profits Tax Act

This section establishes a new excise tax under IRC Chapter 56 on windfall profits from taxable crude oil (i.e., crude oil, crude oil condensates, and natural gasoline), imposed each calendar quarter on each barrel (42 U.S. gallons) extracted in the United States and removed from the taxpayer's property or entered into the United States for consumption, use, or warehousing by a covered taxpayer. The tax rate equals 50% of the excess (if any) of the average quarterly price of Brent crude oil over the average Brent price for calendar year 2025 (inflation-adjusted for quarters after 2026 using chained CPI-U methodology substituting 2025 for 2016, rounded down to the nearest $0.01 if not a multiple of $0.50). A covered taxpayer is any person (including affiliates under IRC aggregation rules) with average daily extraction and imports exceeding 300,000 barrels in calendar year 2025 or the relevant quarter. The tax applies to oil removed or entered after December 31, 2025, with payments for quarters ending before July 1, 2026, deferred until September 30, 2026. (Thus, the tax targets large oil producers and importers when Brent prices exceed the 2025 baseline.)

This section establishes a new refundable tax credit under IRC §6436 (added to subchapter B of chapter 65) for eligible individuals (i.e., U.S. resident individuals who are not nonresident aliens, dependents, estates, or trusts) equal to the sum of gasoline price rebate amounts for calendar quarters in taxable years beginning after December 31, 2025. The quarterly rebate amount, determined by the Treasury Secretary within 30 days after quarter-end, is based on the number of eligible individuals and revenues in the Protect Consumers from Gas Hikes Fund from the tax imposed by §5896 in the prior quarter (150% for joint returns); phases out by 5% of adjusted gross income exceeding $75,000 ($112,500 for head of household; $150,000 for joint); and requires valid Social Security numbers on returns (with joint return reductions to 50% or zero if one or no spouse's number is included, except for military spouses). The section requires regulations as needed; directs comprehensive outreach on eligibility and claims assistance; treats failures to include required identification numbers as mathematical or clerical errors; and authorizes Treasury payments to U.S. possessions (1) equal to mirror-code losses or estimated non-mirror-code benefits (contingent on approved distribution plans) and (2) covering related administrative cost increases.

This section establishes the Protect Consumers from Gas Price Hikes Fund as a trust fund in the Treasury of the United States, to consist of amounts appropriated or credited to the fund, including amounts equivalent to taxes received in the Treasury under section 5896. The Secretary shall transfer from the fund to the general fund of the Treasury amounts equal to refunds provided under section 6436.