Oil windfall tax funds direct rebates to drivers during Iran crisis
H.R. 8803 — Iran War Oil Crisis Windfall Profits Tax Act · Filed by Brad Sherman (D-CA) · Introduced May 13, 2026 · Referred to committee
Your members of Congress
Enter a ZIP to see where your representative and both senators stood on this bill.
Looked up on this device — your ZIP is never stored on our servers.
What it does
This bill imposes a federal excise tax on crude oil and petroleum products when the price of oil exceeds $75 per barrel, with the tax rate equal to 100% of the price above that threshold. The tax applies to both domestically extracted and imported oil, and continues until hostilities with Iran cease, the Strait of Hormuz reopens, and oil prices fall below $75/barrel. Revenue from this windfall tax funds quarterly rebates paid directly to U.S. taxpayers to offset higher gasoline prices.
Why we flagged it
The bill's core function is a temporary excise tax on oil company profits above a price threshold, with revenues directly rebated to consumers. This is a classic windfall-profits mechanism paired with a consumer relief mechanism, not a general revenue-raising tax.
What the text implies
- The 100% tax rate on price above $75/barrel may create perverse incentives: oil companies could reduce production or exports to avoid the tax, potentially worsening supply constraints and paradoxically raising prices further.
- The tax terminates only when THREE conditions are met simultaneously (Iran hostilities cease, Strait of Hormuz reopens, AND oil falls below $75/barrel), creating potential for indefinite duration if geopolitical conditions persist even as prices fluctuate.
The full analysis lists 5 implications of this text.
Who stands to gain
U.S. consumers (via gasoline rebates); Independent oil producers below 100,000 bbl/day threshold (exempt from tax)