End Oil and Gas Tax Subsidies Act of 2025
End Oil and Gas Tax Subsidies Act of 2025
Plain Language Summary
# End Oil and Gas Tax Subsidies Act of 2025 - Plain Language Summary **What the Bill Would Do** This bill would eliminate or reduce various tax breaks that the oil and gas industry currently receives. Specifically, it would remove tax credits for producing oil from older wells and for enhanced oil recovery methods, eliminate deductions for drilling costs, and prevent major oil companies from using a particular accounting method (LIFO) that can reduce their tax bills. The bill would also slow down how quickly oil companies can write off geological and geophysical survey expenses—extending the timeframe from 2 years to 7 years. **Who It Affects** The bill primarily targets major integrated oil and gas companies (large, multinational firms) rather than small independent producers. It would increase the taxes these companies pay by removing financial advantages they currently enjoy.
Supporters argue this levels the playing field for other industries; opponents argue it could affect energy production and investment in the sector. Consumers might potentially be affected if energy companies pass costs along through higher prices. **Current Status** The bill was introduced in the 119th Congress by Representative Sean Casten (D-IL) and is currently in committee, meaning it has not yet been voted on by the full House. This is an early stage in the legislative process.
CRS Official Summary
End Oil and Gas Tax Subsidies Act of 2025This 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 thetax credits for producing oil and gas from marginal wells and enhanced oil recovery,tax deduction for intangible drilling and development costs for oil and gas wells,percentage depletion,tax deduction for tertiary injectant expenses, andexception to the passive loss limitations for working interests in oil and gas property.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).
Latest Action
Referred to the House Committee on Ways and Means.