End Oil and Gas Tax Subsidies Act of 2025
This bill repeals or limits tax deductions and credits related to oil and gas production; increases the amortization period of geological and geophysical expenses; prohibits the use of the last-in, first-out (LIFO) accounting method by certain oil companies; and expands the definition of crude oil for certain purposes.
The bill repeals the
The bill increases the amortization period for geological and geophysical expenses from two years to seven years and prohibits major integrated oil companies from using the LIFO accounting method.
The bill excludes from the qualified business income tax deduction items related to oil and gas production, refining, processing, transporting, and distribution.
The bill provides statutory authority for Internal Revenue Service regulations that exclude from the definition of a tax for purposes of the foreign tax credit levies imposed by foreign countries or U.S. possessions on persons that receive a specific economic benefit from the country or possession.
Finally, the bill defines crude oil for purposes of the excise tax on imported petroleum and crude oil to include bitumen or bituminous mixtures or oil derived from such mixtures (including tar sands) and oil derived from kerogen-bearing sources (including oil shale).
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 383 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 383
To amend the Internal Revenue Code of 1986 to repeal fossil fuel
subsidies for oil companies, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 14, 2025
Mr. Casten (for himself, Mr. Beyer, Mr. Levin, Ms. Brownley, Mr.
Cleaver, Mr. Cohen, Mr. Huffman, Mr. Khanna, Ms. Pingree, Ms.
Schakowsky, Mr. Tonko, and Ms. Moore of Wisconsin) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to repeal fossil fuel
subsidies for oil companies, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``End Oil and Gas Tax Subsidies Act of
2025''.
SEC. 2. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.
(a) In General.--Section 167(h) of the Internal Revenue Code of
1986 is amended--
(1) by striking ``24-month period'' in paragraph (1) and
inserting ``7-year period'', and
(2) by striking paragraph (5).
(b) Effective Date.--The amendment made by this section shall apply
to amounts paid or incurred in taxable years beginning after December
31, 2024.
SEC. 3. PRODUCING OIL AND GAS FROM MARGINAL WELLS.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by striking section 45I
(and by striking the item relating to such section in the table of
sections for such subpart).
(b) Conforming Amendment.--Section 38(b) of such Code is amended by
striking paragraph (19).
(c) Effective Date.--The amendment made by subsection (a) shall
apply to credits determined for taxable years beginning after December
31, 2024.
SEC. 4. ENHANCED OIL RECOVERY CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by striking section 43
(and by striking the item relating to such section in the table of
sections for such subpart).
(b) Conforming Amendment.--Section 38(b) of such Code is amended by
striking paragraph (6).
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred in taxable years beginning after
December 31, 2024.
SEC. 5. INTANGIBLE DRILLING AND DEVELOPMENT COSTS IN THE CASE OF OIL
AND GAS WELLS.
(a) In General.--Subsection (c) of section 263 of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
sentence: ``This subsection shall not apply to amounts paid or incurred
by a taxpayer with respect to an oil or gas well after December 31,
2024.''.
(b) Effective Date.--The amendment made by this section shall apply
to amounts paid or incurred in taxable years beginning after December
31, 2024.
SEC. 6. REPEAL OF PERCENTAGE DEPLETION FOR OIL AND GAS WELLS.
(a) In General.--Part I of subchapter I of chapter 1 of the
Internal Revenue Code of 1986 is amended by striking section 613A (and
the table of sections of such part is amended by striking the item
relating to such section).
(b) Conforming Amendments.--
(1) Subsection (d) of section 45H of such Code is amended--
(A) by striking ``For purposes of this section''
and inserting the following:
``(1) In general.--For purposes of this section'',
(B) by striking ``(within the meaning of section
613A(d)(3))'', and
(C) by adding at the end the following new
paragraph:
``(2) Related person.--For purposes of this subsection, a
person is a related person with respect to the taxpayer if a
significant ownership interest in either the taxpayer or such
person is held by the other, or if a third person has a
significant ownership interest in both the taxpayer and such
person. For purposes of the preceding sentence, the term
`significant ownership interest' means--
``(A) with respect to any corporation, 5 percent or
more in value of the outstanding stock of such
corporation,
``(B) with respect to a partnership, 5 percent or
more interest in the profits or capital of such
partnership, and
``(C) with respect to an estate or trust, 5 percent
or more of the beneficial interests in such estate or
trust.
For purposes of determining a significant ownership interest,
an interest owned by or for a corporation, partnership, trust,
or estate shall be considered as owned directly both by itself
and proportionately by its shareholders, partners, or
beneficiaries, as the case may be.''.
(2) Section 57(a)(1) of such Code is amended by striking
the last sentence.
(3) Section 291(b)(4) of such Code is amended by adding at
the end the following: ``Any reference in the preceding
sentence to section 613A shall be treated as a reference to
such section as in effect prior to the date of the enactment of
the End Oil and Gas Tax Subsidies Act of 2025.''.
(4) Section 613(d) of such Code is amended by striking
``Except as provided in section 613A, in the case of'' and
inserting ``In the case of''.
(5) Section 613(e) of such Code is amended--
(A) by striking ``or section 613A'' in paragraph
(2), and
(B) by striking ``any amount described in section
613A(d)(5)'' in paragraph (3) and inserting ``any lease
bonus, advance royalty, or other amount payable without
regard to production from property''.
(6) Section 705(a) of such Code is amended--
(A) by inserting ``and'' at the end of paragraph
(1)(C),
(B) by striking ``; and'' at the end of paragraph
(2)(B) and inserting a period, and
(C) by striking paragraph (3).
(7) Section 993(c)(2)(C) of such Code is amended by
striking ``section 613 or 613A'' and inserting ``section 613
(determined without regard to subsection (d) thereof)''.
(8) Section 1202(e)(3)(D) of such Code is amended by
striking ``section 613 or 613A'' and inserting ``section 613
(determined without regard to subsection (d) thereof)''.
(9) Section 1367(a)(2) of such Code is amended by inserting
``and'' at the end of subparagraph (C), by striking ``, and''
at the end of subparagraph (D) and inserting a period, and by
striking subparagraph (E).
(10) Section 1446(c) of such Code is amended by striking
paragraph (2) and by redesignating paragraph (3) as paragraph
(2).
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2024.
SEC. 7. REPEAL OF DEDUCTION FOR TERTIARY INJECTANTS.
(a) In General.--Part VI of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by striking section 193 (and
the table of sections of such subpart is amended by striking the item
relating to such section).
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 8. REPEAL OF EXCEPTION TO PASSIVE LOSS LIMITATIONS FOR WORKING
INTERESTS IN OIL AND GAS PROPERTIES.
(a) In General.--Section 469(c)(3) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(C) Termination.--Subparagraph (A) shall not
apply with respect to any taxable year beginning after
the date of the enactment of this Act.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2024.
SEC. 9. DEDUCTION FOR QUALIFIED BUSINESS INCOME NOT ALLOWED WITH
RESPECT TO OIL AND GAS ACTIVITIES.
(a) In General.--Section 199A(c)(3)(B) of the Internal Revenue Code
of 1986 is amended by redesignating clause (vii) as clause (viii), and
by inserting after clause (vi) the following new clause:
``(vii) The production, refining,
processing, transportation, or distribution of
oil, gas, or any primary product thereof.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 10. PROHIBITION ON USING LAST-IN, FIRST-OUT ACCOUNTING FOR OIL AND
GAS COMPANIES.
(a) In General.--Section 472 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(h) Oil and Gas Companies.--
``(1) In general.--Notwithstanding any other provision of
this section, a major integrated oil company may not use the
method provided in subsection (b) in inventorying of any goods.
``(2) Major integrated oil company.--For purposes of this
subsection, the term `major integrated oil company' means, with
respect to any taxable year, a producer of crude oil--
``(A) which has an average daily worldwide
production of crude oil of at least 500,000 barrels for
the taxable year,
``(B) which has gross receipts in excess of
$1,000,000,000 for the taxable year, and
``(C) the average daily refinery runs of the
taxpayer and related persons for the taxable year
exceed 75,000 barrels.
``(3) Special rules.--
``(A) Crude production and gross receipts.--For
purposes of subparagraphs (A) and (B) of paragraph
(2)--
``(i) Controlled groups and common
control.--All persons treated as a single
employer under subsections (a) and (b) of
section 52 shall be treated as 1 person.
``(ii) Short taxable years.--In case of a
short taxable year, the rule under section
448(c)(3)(B) shall apply.
``(B) Average daily refinery runs.--For purposes of
paragraph (2)(C)--
``(i) In general.--The average daily
refinery runs for any taxable year shall be
determined by dividing the aggregate refinery
runs for the taxable year by the number of days
in the taxable year.
``(ii) Related persons.--A person is a
related person with respect to the taxpayer if
a significant ownership interest in either the
taxpayer or such person is held by the other,
or if a third person has a significant
ownership interest in both the taxpayer and
such person.
``(iii) Significant ownership interest.--
For purposes of clause (ii), the term
`significant ownership interest' means--
``(I) with respect to any
corporation, 15 percent or more in
value of the outstanding stock of such
corporation,
``(II) with respect to a
partnership, 15 percent or more
interest in the profits or capital of
such partnership, and
``(III) with respect to an estate
or trust, 15 percent or more of the
beneficial interests in such estate or
trust.
For purposes of determining a significant
ownership interest, an interest owned by or for
a corporation, partnership, trust, or estate
shall be considered as owned directly both by
itself and proportionately by its shareholders,
partners, or beneficiaries, as the case may
be.''.
(b) Effective Date and Special Rule.--
(1) In general.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 2024.
(2) Change in method of accounting.--In the case of any
taxpayer required by the amendment made by this section to
change its method of accounting for its first taxable year
beginning after the date of the enactment of this Act--
(A) such change shall be treated as initiated by
the taxpayer,
(B) such change shall be treated as made with the
consent of the Secretary of the Treasury, and
(C) the net amount of the adjustments required to
be taken into account by the taxpayer under section 481
of the Internal Revenue Code of 1986 shall be taken
into account ratably over a period (not greater than 8
taxable years) beginning with such first taxable year.
SEC. 11. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO DUAL
CAPACITY TAXPAYERS.
(a) In General.--Section 901 of the Internal Revenue Code of 1986
is amended by redesignating subsection (n) as subsection (o) and by
inserting after subsection (m) the following new subsection:
``(n) Special Rules Relating to Dual Capacity Taxpayers.--
``(1) General rule.--Notwithstanding any other provision of
this chapter, any amount paid or accrued by a dual capacity
taxpayer to a foreign country or possession of the United
States for any period with respect to combined foreign oil and
gas income (as defined in section 907(b)(1)) shall not be
considered a tax to the extent such amount exceeds the amount
(determined in accordance with regulations) which would have
been required to be paid if the taxpayer were not a dual
capacity taxpayer.
``(2) Dual capacity taxpayer.--For purposes of this
subsection, the term `dual capacity taxpayer' means, with
respect to any foreign country or possession of the United
States, a person who--
``(A) is subject to a levy of such country or
possession, and
``(B) receives (or will receive) directly or
indirectly a specific economic benefit (as determined
in accordance with regulations) from such country or
possession.''.
(b) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to taxes paid or accrued in taxable years beginning after
December 31, 2024.
(2) Contrary treaty obligations upheld.--The amendments
made by this section shall not apply to the extent contrary to
any treaty obligation of the United States.
SEC. 12. CLARIFICATION OF TAR SANDS AS CRUDE OIL FOR EXCISE TAX
PURPOSES.
(a) In General.--Paragraph (1) of section 4612(a) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(1) Crude oil.--The term `crude oil' includes crude oil
condensates, natural gasoline, any bitumen or bituminous
mixture, any oil derived from a bitumen or bituminous mixture
(including oil derived from tar sands), and any oil derived
from kerogen-bearing sources (including oil derived from oil
shale).''.
(b) Regulatory Authority To Address Other Types of Crude Oil and
Petroleum Products.--Subsection (a) of section 4612 of such Code is
amended by adding at the end the following new paragraph:
``(10) Regulatory authority to address other types of crude
oil and petroleum products.--Under such regulations as the
Secretary may prescribe, the Secretary may include as crude oil
or as a petroleum product subject to tax under section 4611,
any fuel feedstock or finished fuel product customarily
transported by pipeline, vessel, railcar, or tanker truck if
the Secretary determines that--
``(A) the classification of such fuel feedstock or
finished fuel product is consistent with the definition
of oil under the Oil Pollution Act of 1990, and
``(B) such fuel feedstock or finished fuel product
is produced in sufficient commercial quantities as to
pose a significant risk of hazard in the event of a
discharge.''.
(c) Technical Amendment.--Paragraph (2) of section 4612(a) of such
Code is amended by striking ``from a well located''.
(d) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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