Fueling Alternative Transportation with a Carbon Aviation Tax Act of 2025

Tax Refunds for Emergency and Scientific Use: The Secretary can pay the increase in tax back to the purchaser if the fuel was used for scientific research, natural disaster evacuations, or medical emergencies (Section 2(b)).

Improved Air Quality Monitoring: Money from the new trust fund can be used for grants to deploy and maintain air monitoring stations, including sensors in low-sincome and disadvantaged communities (Section 3(a)(1)(A)).

Enhanced Public Transportation: The bill allows for the expansion, repair, and maintenance of public transit and passenger rail systems located within 20 miles of an airport (Section 3(a)(1)(B)).

Support for Disadvantaged Communities: At least 50 percent of the trust fund expenditures must be designated for disadvantaged communities, with priority given to those disproportionately impacted by air pollution (Section 3(a)(2)).

Improved Bus Services: Funds can be used to improve public transportation, specifically focusing on providing more safe, frequent, and reliable bus service in disadvantaged communities (Section 3(a)(1)(C)).

Increased Tax Burden on Non-Commercial Aviation: The bill increases the retail and manufacturers excise tax on fuel used for aviation that is not described as commercial aviation (Section 2(a)(1)(B) and Section 2(a)(2)(A)).

Rising Costs due to Inflation: The tax rate for certain aviation fuel includes a dollar amount that will increase annually after 2026 based on cost-of-living adjustments (Section 2(a)(1)(4) and Section 2(a)(2)(B)).

Loss of Tax Exemptions for Certain Air Transportation: The bill eliminates the exemption from the Air Transportation Excise Tax for certain uses of helicopters or fixed-wing aircraft related to the planting, cultivation, cutting, or care of trees, provided they meet specific facility and service criteria (Section 2(c)).