{"id":747,"date":"2010-05-26T00:20:22","date_gmt":"2010-05-26T00:20:22","guid":{"rendered":"http:\/\/www.reefrelieffounders.com\/drilling\/?p=747"},"modified":"2010-05-26T00:20:34","modified_gmt":"2010-05-26T00:20:34","slug":"bignews-biz-new-menendez-bill-would-close-tax-loopholes-enjoyed-by-big-oil","status":"publish","type":"post","link":"https:\/\/www.reefrelieffounders.com\/drilling\/2010\/05\/26\/bignews-biz-new-menendez-bill-would-close-tax-loopholes-enjoyed-by-big-oil\/","title":{"rendered":"Bignews.biz: New Menendez Bill Would Close Tax Loopholes enjoyed by Big Oil"},"content":{"rendered":"

http:\/\/bignews.biz\/?id=875794&keys=Senator-Robert-Menendez-OilCompanies<\/a><\/p>\n

Bill Nelson and Merkley co-sponsor legislation announced today; estimated to save taxpayers more than $20 billion over ten years
\nMay 24, 2010
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\nWASHINGTON – U.S. Senator Robert Menendez (D-NJ) today announced legislation that will close a number of corporate tax loopholes that allow oil companies to avoid paying billions of dollars in taxes. The Close Big Oil Tax Loopholes Act, co-sponsored by Senators Bill Nelson (D-FL) and Jeff Merkley (D-OR), targets a series of tax breaks related to drilling activities and revenues, as well as\u00a0 foreign tax schemes. Menendez estimates that closing these loopholes will amount to more than $20 billion over ten years for the taxpayers.
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\n“The flow of revenues to oil companies is like the gusher at the bottom of the Gulf of Mexico: heavy and constant,” said Menendez. “There is no reason for these corporations to shortchange the American taxpayer. They certainly aren’t using the extra money they get from exploiting these loopholes to help bring down the price of gas for our families. Unlike the underwater geyser in the Gulf, we can shut down these loopholes quickly and permanently when we pass this legislation.”
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\n“I’d like to see us pay for an accelerated alternative-fuels program by ending the billions of dollars in giveaways to Big Oil,” said Nelson.\u00a0 “Previous attempts to close these loopholes were dead-on-arrival, because of the industry’s clout.\u00a0 Maybe that won’t be the case this time.”
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\n“At a time when millions of Americans are struggling to find work, oil companies that are making billions in profit are still receiving billions more in government subsidies,” Merkley said.\u00a0 “It’s time that we stop handing over cash to the big oil companies and start investing in clean energy solutions that will strengthen our national security and create American jobs.”
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\nAmong its provisions, the legislation would accomplish the following:
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\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Recoup royalties that oil companies avoided paying for oil and gas production on public lands
\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Prevent oil companies from manipulating the rules on foreign taxes to avoid paying full corporate taxes in the U.S.
\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 End a number of tax deductions and relief afforded to the oil industry, such as the deductions for classifying oil production as manufacturing, for the depletion of oil and gas through drilling and for costs associated with preparing to drill.
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\nOil companies make up four of the top ten spots on the Fortune 100 list of largest corporations. In the first three months of this year alone, the top 5 oil companies made over $23 billion in profits.
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\nThe Close Big Oil Tax Loopholes Act is based upon provisions in President Obama’s Budget in which he signaled the need to stop subsidizing polluting industries. The bill does contain important safeguards to allow refineries and oil companies with yearly revenues of less than $100 million to retain certain tax credits and deductions.
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\nBackground on legislation:
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\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Recoup Royalty Revenue Lost to Contract Loopholes: This proposal would create an excise tax on oil and gas produced on federal lands on the Outer Continental Shelf (OCS) in order to pay back American taxpayers for contract loopholes whereby oil and gas companies avoided paying royalties on certain oil and gas produced in the Gulf of Mexico.\u00a0 This would save an estimated $5.3 billion.
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\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 End Oil Companies Abuse of Foreign Tax Credits: Would require that a dual capacity taxpayer establish that the foreign country generally impose an income tax to be able to claim a foreign levy as a creditable tax, saving $8.2 billion.
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\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Repeal Expensing of Intangible Drilling Costs: Would repeal the deduction for IDCs and require such costs be capitalized as a cost of the well or tangible property and recovered through depreciation or depletion, as applicable.\u00a0 Oil companies with yearly revenues of less than $100 million would retain the use of this deduction. In the President’s Budget this provision saved $10.9 billion, but the grandfathering of smaller companies will lower that score.
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\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Repeal Percentage Depletion for Oil and Gas Wells: This proposal would repeal percentage depletion for oil and gas properties. Oil companies with yearly revenues of less than $100 million would retain the use of this deduction. In the President’s Budget this provision saved $9.6 billion, but the grandfathering of smaller companies will lower that score.
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\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Repeal Deduction for Tertiary Injectants: The proposal would repeal the current deduction and instead allow oil companies to capitalize and depreciate or deplete costs for tertiary injectants.\u00a0 For example, supply costs would be capitalized and deducted when consumed or as part of cost of goods sold. Oil companies with yearly revenues of less than $100 million would retain the use of this deduction.\u00a0 In the President’s Budget this provision saved $57 million, but the grandfathering of smaller companies will lower that score.
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\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Repeal Exemption of Passive Loss Limitations for Interests in Oil and Gas Properties:\u00a0 The proposal would end the exemption from passive loss rules for oil companies so they must operate under the same tax rules as other corporations.\u00a0 Oil companies with yearly revenues of less than $100 million would retain the use of this exemption. In the President’s Budget this provision saved $217 million, but the grandfathering of smaller companies will lower that score.
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\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Repeal Domestic Manufacturing Deduction for Oil and Gas Production: This proposal would repeal the ability of oil and gas companies to claim oil and gas production as manufacturing, thus making the production activities ineligible for the domestic production activities deduction.\u00a0 Oil companies with yearly revenues of less than $100 million would retain the use of this deduction.\u00a0 The deduction would also be retained for oil refining and natural gas processing. This exact proposal has not been scored, but could easily save billions.
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\n\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Match Geological and Geophysical Amortization Periods for All Oil and Gas Companies: This proposal would create more uniform amortization rules for geological and geophysical costs.\u00a0 G&G costs are costs incurred in obtaining and accumulating data that serves as the basis for acquiring and retaining oil and gas properties.\u00a0 Oil companies with yearly revenues of less than $100 million could amortize geological and geophysical costs over two years.\u00a0 All others would amortize these costs over 7 years. In the President’s Budget this provision saved approximately $1 billion, but the grandfathering of smaller companies will lower that score.<\/p>\n

Special thanks to Richard Charter<\/p>\n","protected":false},"excerpt":{"rendered":"

http:\/\/bignews.biz\/?id=875794&keys=Senator-Robert-Menendez-OilCompanies Bill Nelson and Merkley co-sponsor legislation announced today; estimated to save taxpayers more than $20 billion over ten years May 24, 2010 \u00a0 WASHINGTON – U.S. Senator Robert Menendez (D-NJ) today announced legislation that will close a number of corporate tax loopholes that allow oil companies to avoid paying billions of dollars in taxes. … Continue reading Bignews.biz: New Menendez Bill Would Close Tax Loopholes enjoyed by Big Oil<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1],"tags":[],"class_list":["post-747","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.reefrelieffounders.com\/drilling\/wp-json\/wp\/v2\/posts\/747","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.reefrelieffounders.com\/drilling\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.reefrelieffounders.com\/drilling\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.reefrelieffounders.com\/drilling\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.reefrelieffounders.com\/drilling\/wp-json\/wp\/v2\/comments?post=747"}],"version-history":[{"count":4,"href":"https:\/\/www.reefrelieffounders.com\/drilling\/wp-json\/wp\/v2\/posts\/747\/revisions"}],"predecessor-version":[{"id":751,"href":"https:\/\/www.reefrelieffounders.com\/drilling\/wp-json\/wp\/v2\/posts\/747\/revisions\/751"}],"wp:attachment":[{"href":"https:\/\/www.reefrelieffounders.com\/drilling\/wp-json\/wp\/v2\/media?parent=747"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.reefrelieffounders.com\/drilling\/wp-json\/wp\/v2\/categories?post=747"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.reefrelieffounders.com\/drilling\/wp-json\/wp\/v2\/tags?post=747"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}