Iran War Oil Crisis Windfall Profits Tax Act

Key Points

• The bill creates a 100% excise tax on oil profits above $75 per barrel for large oil companies that produce or import more than 100,000 barrels per day. This effectively captures all "windfall" revenue these companies earn from price spikes caused by the Iran conflict and Strait of Hormuz disruption.
• All tax revenue collected goes into a dedicated trust fund called the Iran War Gasoline Price Relief Fund, which is then distributed as refundable tax credits (rebate checks) to eligible individual taxpayers. Most adult residents qualify, excluding nonresident aliens, dependents, and estates or trusts.
• The tax and rebates remain in effect until three conditions are all met: the President declares hostilities with Iran have ceased, the Strait of Hormuz is fully reopened, and the price of oil drops below $75 per barrel. This means the program could last months or years depending on how the conflict unfolds.
• Only the largest oil companies are subject to the tax. The threshold is set at 100,000 barrels per day of production or imports, which limits the tax to major integrated oil companies and large importers. All related corporate entities are aggregated together to prevent companies from splitting operations to dodge the threshold.
• The $75 per barrel threshold is adjusted for inflation in future years, ensuring it keeps pace with the cost of living. The Treasury Department must issue implementing regulations within 90 days and launch an outreach program within 30 days to make sure people know about the rebates.