I
109th CONGRESS
1st Session
H. R. 4276
IN THE HOUSE OF REPRESENTATIVES
November 9, 2005
Mr. Larson of Connecticut (for himself and Ms. DeLauro) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Energy and Commerce, Education and the Workforce, and Veterans’ Affairs, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 to impose a windfall profit tax on oil and natural gas (and products thereof) and to use the proceeds of the windfall profit tax collected to carry out the Low-Income Home Energy Assistance Act and for medical services provided by the Department of Veterans Affairs.
Short title
This Act may be cited as the Consumer Windfall Excess Oil Profits Protection Act of 2005
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Windfall profits tax on crude oil, natural gas, and products thereof
In general
Subtitle E of the Internal Revenue Code of 1986 (relating to alcohol, tobacco, and certain other excise taxes) is amended by adding at the end thereof the following new chapter:
Windfall profits on crude oil, natural gas, and products thereof
Sec. 5896. Imposition of tax.
Sec. 5897. Windfall profit; etc.
Sec. 5898. Special rules and definitions.
Imposition of tax
In addition to any other tax imposed under this title, there is hereby imposed on every taxpayer an excise tax in an amount equal to 50 percent of the windfall profit for any taxable year from—
sales of any crude oil, natural gas, or other taxable product thereof, and
net gains from transactions of an interest the price of which is determined in whole or in part by reference to the price of crude oil, natural gas, or other taxable product thereof.
Windfall profit; etc
General rule
For purposes of this chapter, the term windfall profit means the excess of—
the adjusted taxable income of the taxpayer for the taxable year, over
the reasonably inflated average profit for such taxable year.
Adjusted taxable income
For purposes of this chapter, with respect to any taxpayer, the adjusted taxable income for any taxable year is equal to the taxable income for such taxable year (within the meaning of section 63 and determined without regard to this subsection)—
increased by any interest expense deduction, charitable contribution deduction, and any net operating loss deduction carried forward from any prior taxable year, and
reduced by any interest income, dividend income, and net operating losses to the extent such losses exceed taxable income for the taxable year.
Reasonably inflated average profit
For purposes of this chapter, with respect to any applicable taxpayer, the reasonably inflated average profit for any taxable year is an amount equal to the average of the adjusted taxable income of such taxpayer for taxable years beginning during the 2000–2004 taxable year period (determined without regard to the taxable year with the highest adjusted taxable income in such period) plus 10 percent of such average.
Taxable product thereof
The term taxable product thereof means any fuel which is a product of crude oil or natural gas.
Special rules and definitions
Withholding and deposit of tax
The Secretary shall provide such rules as are necessary for the withholding and deposit of the tax imposed under section 5896.
Records and information
Each taxpayer liable for tax under section 5896 shall keep such records, make such returns, and furnish such information as the Secretary may by regulations prescribe.
Return of windfall profit tax
The Secretary shall provide for the filing and the time of such filing of the return of the tax imposed under section 5896.
Businesses under common control
For purposes of this chapter, all members of the same controlled group of corporations (within the meaning of section 267(f)) and all persons under common control (within the meaning of section 52(b) but determined by treating an interest of more than 50 percent as a controlling interest) shall be treated as 1 person.
Regulations
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this chapter.
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Clerical amendment
The table of chapters for subtitle E of such Code is amended by adding at the end the following new item:
Chapter 56. Windfall profits on crude oil, natural gas, and products thereof.
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Deductibility of windfall profit tax
The first sentence of section 164(a) of such Code (relating to deduction for taxes) is amended by inserting after paragraph (5) the following new paragraph:
The windfall profit tax imposed by section 5896.
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Effective date
The amendments made by this section shall apply to taxable years beginning in 2005 or 2006.
Use of proceeds from windfall profits on crude oil, natural gas, and products thereof
There are hereby appropriated amounts equivalent to the taxes received in the Treasury under chapter 56 of the Internal Revenue Code of 1986, as follows:
50 percent of such amounts, which shall be available only for carrying out the Low-Income Home Energy Assistance Act of 1981, and
50 percent of such amounts, which shall be credited to the current appropriation of the Department of Veterans Affairs that is available for medical services.