II
109th CONGRESS
1st Session
S. 2103
IN THE SENATE OF THE UNITED STATES
December 14, 2005
Mr. Reid (for Mr. Lieberman) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To impose a temporary windfall profits tax on crude oil and provide a rebate to each household from the revenues resulting from such tax.
Temporary windfall profits tax
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:
Temporary windfall profits on crude oil
Sec. 5896. Imposition of tax.
Sec. 5897. Windfall profit; removal price; adjusted base price; qualified investment.
Sec. 5898. Special rules and definitions.
Imposition of tax
In general
In addition to any other tax imposed under this title, there is hereby imposed on any integrated oil company (as defined in section 291(b)(4)) an excise tax equal to 50 percent of the windfall profit from all barrels of taxable crude oil removed from the property during taxable years beginning in 2005.
Fractional part of barrel
In the case of a fraction of a barrel, the tax imposed by subsection (a) shall be the same fraction of the amount of such tax imposed on the whole barrel.
Tax paid by producer
The tax imposed by this section shall be paid by the producer of the taxable crude oil.
Windfall profit; removal price; adjusted base price
General rule
For purposes of this chapter, the term windfall profit means the excess of the removal price of the barrel of taxable crude oil over the adjusted base price of such barrel.
Removal price
For purposes of this chapter—
In general
Except as otherwise provided in this subsection, the term removal price means the amount for which the barrel of taxable crude oil is sold.
Sales between related persons
In the case of a sale between related persons, the removal price shall not be less than the constructive sales price for purposes of determining gross income from the property under section 613.
Oil removed from property before sale
If crude oil is removed from the property before it is sold, the removal price shall be the constructive sales price for purposes of determining gross income from the property under section 613.
Refining begun on property
If the manufacture or conversion of crude oil into refined products begins before such oil is removed from the property—
such oil shall be treated as removed on the day such manufacture or conversion begins, and
the removal price shall be the constructive sales price for purposes of determining gross income from the property under section 613.
Property
The term property has the meaning given such term by section 614.
Adjusted base price defined
For purposes of this chapter, the term adjusted base price means $40 for each barrel of taxable crude oil.
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 on any taxable crude oil.
Records and information
Each taxpayer liable for tax under section 5896 shall keep such records, make such returns, and furnish such information (to the Secretary and to other persons having an interest in the taxable crude oil) with respect to such oil 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.
Definitions
For purposes of this chapter—
Producer
The term producer means the holder of the economic interest with respect to the crude oil.
Crude oil
In general
The term crude oil includes crude oil condensates and natural gasoline.
Exclusion of newly discovered oil
Such term shall not include any oil produced from a well drilled after the date of the enactment of the chapter, except with respect to any oil produced from a well drilled after such date on any proven oil or gas property (within the meaning of section 613A(c)(9)(A)).
Barrel
The term barrel means 42 United States gallons.
Adjustment of removal price
In determining the removal price of oil from a property in the case of any transaction, the Secretary may adjust the removal price to reflect clearly the fair market value of oil removed.
Regulations
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this chapter.
.
Clerical amendment
The table of chapters for subtitle E of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
Chapter 56. Temporary windfall profit on crude oil.
.
Deductibility of windfall profit tax
The first sentence of section 164(a) of the Internal Revenue Code of 1986 (relating to deduction for taxes) is amended by inserting after paragraph (5) the following new paragraph:
The windfall profit tax imposed by section 5896.
.
Effective Date
The amendments made by this section shall apply to taxable years beginning in 2005.
Household rebate
In general
Subchapter B of chapter 65 of the Internal Revenue Code of 1986 (relating to rules of special application in the case of abatements, credits, and refunds) is amended by adding at the end the following new section:
Household rebate
General rule
Except as otherwise provided in this section, each individual shall be treated as having made a payment against the tax imposed by chapter 1 for the taxable year beginning in 2005 in an amount equal to $450.
Remittance of payment
The Secretary shall remit to each taxpayer the payment described in subsection (a) not later than March 1, 2006.
Certain persons not eligible
This section shall not apply to—
any taxpayer who did not have any adjusted gross income for the preceding taxable year or whose adjusted gross income for such preceding taxable year exceeded $40,000,
any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for the taxable year beginning in 2005,
any estate or trust, or
any nonresident alien individual.
.
Conforming amendment
Section 1324(b)(2)
of title 31, United States Code, is amended by inserting before the period
, or from section 6430
.
Clerical amendment
The table of sections for subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:
Sec. 6430. Household rebate.
.
Effective date
The amendments made by this section shall take effect on the date of the enactment of this Act.