H.R. 25 · 119th Congress
FairTax Act of 2025
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CarterSponsor14 cosponsors · 14 R
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Biggs
EB
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Burlison
JC
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Carter
AC
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Clyde
WD
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Davidson
RM
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McCormick
SP
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Perry
JR
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Rutherford
DS
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Strong
BL
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Loudermilk
AH
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Harris
MH
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Harris
MC
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Collins
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Moore9 signed on when it was introduced; the rest joined later. Cosponsors who withdrew aren't shown.
This bill replaces federal income, payroll, estate, and gift taxes with a federal sales tax beginning in 2027 and eliminates the Internal Revenue Service.
What it does: CRS summary · Introduced in House · Jan 3, 2025
FairTax Act of 2025
This bill replaces federal income, payroll, estate, and gift taxes with a federal sales tax beginning in 2027 and eliminates the Internal Revenue Service.
The bill establishes a 23% tax-inclusive (30% tax-exclusive) federal sales tax rate on taxable property and services to be administered primarily by each state. The federal sales tax rate is adjusted annually beginning in 2028 so that it is the sum of the
- general revenue rate (14.91%);
- old-age, survivors and disability insurance rate; and
- hospital insurance rate.
The bill includes exemptions for property or services purchased for business, investment, and certain state government functions.
Registered, qualified families may receive a monthly sales tax rebate in the amount of the monthly federal poverty level (or twice such amount for married individuals) multiplied by the federal sales tax rate. Each family member must have a Social Security number and be a lawful resident of the United States.
Federal sales tax revenues are allocated to general revenue, the Social Security trust funds, and the Medicare trust funds. (Special allocation rules apply for 2027.)
The bill eliminates appropriations for the Internal Revenue Service after FY2029 and establishes an Excise Tax Bureau and a Sales Tax Bureau within the Department of the Treasury.
Finally, the bill terminates the federal sales tax if the Sixteenth Amendment to the Constitution (authorizing a federal income tax) is not repealed within seven years from the date the bill is enacted.
Written by the nonpartisan Congressional Research Service. All summary versions on Congress.gov
About this bill and sources
Official title: FairTax Act of 2025
Latest action (Jan 3, 2025): Referred to the House Committee on Ways and Means.
Policy area: Taxation · Origin: House · Introduced: Jan 3, 2025
Official page on Congress.gov · Bill text (GovInfo) · Status record (XML)
No recorded floor vote found.