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 Bill Text - AB-1745 Motor Vehicle Fuel Tax Law: suspension of tax.

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 |Add To My Favorites |Track Bill | Version: 02/09/26 - Introduced

 AB-1745 Motor Vehicle Fuel Tax Law: suspension of tax.(2025-2026)

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 Date Published: 02/09/2026 09:00 PM

AB1745:v99#DOCUMENTBill Start

 CALIFORNIA LEGISLATURE—
 2025–2026 REGULAR SESSION

 Assembly Bill

No. 1745

Introduced by Assembly Member Jeff Gonzalez
(Coauthors: Assembly Members Alanis, Castillo, Chen, Davies, DeMaio, Ellis, Hoover, Patterson, Sanchez, and Wallis)
(Coauthors: Senators Alvarado-Gil, Choi, Grove, Jones, Niello, Ochoa Bogh, and Valladares)

February 09, 2026

 An act to amend Sections 7360, 7362, 7363, and 7364 of, and to add Section 7374 to, the Revenue and Taxation Code, relating to taxation, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. 

LEGISLATIVE COUNSEL'S DIGEST

AB 1745, as introduced, Jeff Gonzalez.
 Motor Vehicle Fuel Tax Law: suspension of tax.

Existing law, the Motor Vehicle Fuel Tax Law, imposes a tax upon each gallon of motor vehicle fuel removed from a refinery or terminal rack in this state, entered into this state, or sold in this state, at a specified rate per gallon.

Existing unfair competition laws establish a statutory cause of action for unfair competition, including any unlawful, unfair, or fraudulent business act or practice and unfair, deceptive, untrue, or misleading advertising and acts prohibited by false advertisement laws. 

This bill would suspend the imposition of the tax on motor vehicle fuels for one year. The bill would require that all savings realized based on the suspension of the motor vehicle fuels tax by a person other than an end consumer, as defined, be passed on to
 the end consumer, and would make the violation of this requirement an unfair business practice, in violation of unfair competition laws, as provided. The bill would require a seller of motor vehicle fuels to provide a receipt to a purchaser that indicates the amount of tax that would have otherwise applied to the transaction.

This bill would also direct the Controller to transfer a specified amount from the General Fund to the Motor Vehicle Fuel Account in the Transportation Tax Fund. By transferring General Fund moneys to a continuously appropriated account, this bill would make an appropriation.

This bill would declare that it is to take effect immediately as an urgency statute.

Digest Key

 Vote:
 2/3 
 Appropriation:
 YES 
 Fiscal Committee:
 YES 
 Local Program:
 NO 

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 7360 of the Revenue and Taxation Code is amended to read:

7360.

 (a) (1) A Except as provided in Section 7374, a tax of eighteen cents ($0.18) is hereby imposed upon each gallon of fuel subject to the tax in Sections 7362, 7363, and 7364.

(2) If the federal fuel tax is reduced below the rate of nine cents ($0.09) per gallon and federal financial allocations to this state for highway and exclusive public mass transit guideway purposes are reduced or eliminated correspondingly, the tax rate imposed by paragraph (1), on and after the date of the reduction, shall be recalculated by an amount so that the combined state rate
 under paragraph (1) and the federal tax rate per gallon equal twenty-seven cents ($0.27).

(3) If any person or entity is exempt or partially exempt from the federal fuel tax at the time of a reduction, the person or entity shall continue to be so exempt under this section.

(b) (1) On Except as provided in Section 7374, on and after July 1, 2010, in addition to the tax imposed by subdivision (a), a tax is hereby imposed upon each gallon of motor vehicle fuel, other than aviation gasoline, subject to the tax in Sections 7362, 7363, and 7364 in an amount equal to seventeen and three-tenths cents ($0.173) per gallon.

(2) For the 2011–12 fiscal year and each fiscal year thereafter, the board shall, on or before March 1 of the fiscal year immediately preceding the applicable fiscal year, adjust the rate in paragraph (1) in that manner as to generate an amount of revenue that will equal the amount of revenue loss attributable to the exemption provided by Section 6357.7, based on estimates made by the board, and that rate shall be effective during the state’s next fiscal year.

(3) In order to maintain revenue neutrality for each year, beginning