Oil and Gas Tax Act of 1979

Oil and Gas Tax Act of 1979 - Amends the Internal Revenue Code to repeal the percentage depletion allowance for independent oil and gas producers and royalty owners.

Repeals the tax treatment of intangible drilling and development costs for oil and gas wells (except nonproductive wells) as currently deductible expenses. Requires that such costs be capitalized and amortized over a 120 month period.

Excludes from gross income foreign oil and gas income. Defines such income as any amount derived from an oil or gas property located outside the United States to the extent that such amount constitutes gross income from property for purposes of the percentage depletion allowance.

Requires the payment of income taxes at the corporate level on the foreign oil-related income of domestic corporations.