Markey, Blumenauer Reintroduce Legislation to Close Tar Sands Tax Loophole

Legislation would save taxpayers nearly $2 billion

WASHINGTON (February 15, 2013) – Rep. Ed Markey (D-Mass.) and Rep. Earl Blumenauer (D-Ore.) today reintroduced legislation to close a special tax loophole for oil companies that import tar sands oil into the United States. In May 2011, the Internal Revenue Service (IRS) issued a ruling that tar sands oil was not crude oil or petroleum product and therefore oil companies importing it are not subject to the same tax imposed on the oil industry that funds the Oil Spill Liability Trust Fund. The largest source of revenue for the fund comes from an 8 cent per barrel excise tax on crude oil received at U.S. refineries or on petroleum products imported into the United States. The legislation, the Tar Sands Tax Loophole Elimination Act, would ensure that oil companies pay into the trust fund for tar sands oil.

“Only the oil industry could try to argue that tar sands oil is not crude oil to avoid paying their fair share,” said Rep. Markey, the top Democrat on the Natural Resources Committee. “We should not allow some of the dirtiest oil in the world to get a free ride. The legislation that Representative Blumenauer and I are introducing today would close this loophole once and for all.”

“Exploiting tar sands is an environmentally destructive, potentially dangerous, and expensive way to get oil” said Rep. Blumenauer. “And yet, rather than doing everything we can to discourage this practice, we have a system that could allow big oil companies to slip through the cracks and avoid fair taxation. This bill will make sure that oil companies, which already get billions of dollars in taxpayer-based subsidies, are not given an additional free ride on the tar sands.”

Last year, Rep. Markey asked the Treasury Department about this tar sands tax loophole and released a report on the loophole. Taxpayers stand to lose nearly $2 billion over the next 10 years as a result of this tar sands tax loophole, according to the Joint Committee on Taxation.

http://markey.house.gov/press-release/markey-blumenauer-reintroduce-legislation-close-tar-sands-tax-loophole

S. 388, the American Family Economic Protection Act of 2013

S. 388 would eliminate the automatic spending reductions scheduled to occur under current law for 2013 and would partially eliminate the reductions scheduled for 2014. The bill also would eliminate direct payments to certain agricultural producers, provide funding for agricultural disaster assistance, and exempt from sequestration all mandatory funding provided for the Department of Agriculture.

In addition, S. 388 would ensure that taxpayers with annual income above $5 million face an average tax rate of at least 30 percent on their income, and it would extend an existing per-barrel tax on oil production to oil produced from tar sands.

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http://www.cbo.gov/publication/43960