Senate expected to consider additional taxes on oil and gas industry

US senators will be asked to approve additional taxes on the oil and gas industry by the end of the week to help finance $40 billion in clean energy financial incentives.

US senators will be asked to approve additional taxes on the oil and gas industry by the end of the week to help finance $40 billion in clean energy financial incentives.

The $17 billion would come in part from freezing the tax deduction for US oil and gas companies' domestic activities, tightening rules by which oil and gas companies pay taxes on income earned overseas, and freeing money from the general fund by increasing payments into the oil spill liability trust fund as new drilling is considered, Senate Finance Committee leaders said on Sept. 16.

The rest would be raised by extending the Federal Unemployment Tax Act surtax at the current level for one year, according to Chairman Max Baucus (D-Mont.) and Ranking Minority Member Charles E. Grassley (R-Iowa).

The new taxes are part of a broader agreement which also would increase the threshold at which taxpayers become subject to the alternative minimum tax, and extend tax cuts for college tuition, state and local sales taxes, and research and development for US businesses, they indicated.

"This month, the Senate can act to create jobs, break America's dependence on foreign oil, support working families and help businesses thrive. This agreement will lead America toward clean, homegrown energy and the good-paying jobs that come with it," Baucus said.

The proposals would come as amendments to HR 6049, the Renewable Energy and Job Creation Act of 2008, which passed the House by 236 to 160 votes on May 21.

Other Senate Finance Committee members endorsed the proposals and called for their immediate adoption. "Although long overdue, I am so pleased that the Senate has come to an agreement to renew expiring tax provisions critical to families across America, as well as to provide incentives for the production of clean energy and conservation that could create 100,000 new jobs," Olympia J. Snowe (R-Me.) said on Sept 17.

Contact Nick Snow at nicks@pennwell.com

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