Sec. 401 Short title
This Act may be cited as the “End Big Oil Tax Subsidies Act of 2013”.
Title IV — Repeal of Fossil Fuel Subsidies For Large Oil Companies
IV Repeal of Fossil Fuel Subsidies For Large Oil Companies
Sec. 402 Amortization of geological and geophysical expenditures
In general— Subparagraph (A) of section 167(h)(5) of the Internal Revenue Code of 1986 is amended by striking “major integrated oil company” and inserting “covered large oil company”.
Covered large oil company— Paragraph (5) of section 167(h) of such Act is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph:
“(B) Covered large oil company—For purposes of this paragraph, the term covered large oil company means a taxpayer which—
“(i) is a major integrated oil company, or
“(ii) has gross receipts in excess of $50,000,000 for the taxable year.”
Conforming amendment— The heading for paragraph (5) of section 167(h) of such Code is amended by inserting “and other large taxpayers”.
Effective date— The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2012.
Sec. 403 Producing oil and gas from marginal wells
In general— Section 45I of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(e) Exception for taxpayer with gross receipts in excess of $50,000,000
“(1) In general—Subsection (a) shall not apply to any taxpayer whose aggregate gross receipts for the taxable year are in excess of $50,000,000.
“(2) Aggregation rule—For purposes of paragraph (1), all persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person.”
Effective date— The amendment made by subsection (a) shall apply to credits determined for taxable years beginning after December 31, 2012.
Sec. 404 Enhanced oil recovery credit
In general— Section 43 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(f) Exception for taxpayer with gross receipts in excess of $50,000,000
“(1) In general—Subsection (a) shall not apply to any taxpayer whose aggregate gross receipts for the taxable year are in excess of $50,000,000.
“(2) Aggregation rule—For purposes of paragraph (1), all persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person.”
Effective date— The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2012.
Sec. 405 Intangible drilling and development costs in the case of oil and gas wells
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 in any taxable year in which such taxpayer has aggregate gross receipts for the taxable year in excess of $50,000,000, determined by deeming all persons treated as a single employer under subsections (a) and (b) of section 52 as 1 person.”.
Effective date— The amendment made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2012.
Sec. 406 Percentage depletion
In general— Section 613A of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(f) Exception for taxpayer with gross receipts in excess of $50,000,000
“(1) In general—This section and section 611 shall not apply to any taxpayer which has aggregate gross receipts for the taxable year in excess of $50,000,000.
“(2) Aggregation rule—For purposes of paragraph (1), all persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person.”
Conforming amendment— Section 613A(c)(1) of such Code is amended by striking “subsection (d)” and inserting “subsections (d) and (f)”.
Effective date— The amendment made by this section shall apply to taxable years beginning after December 31, 2012.
Sec. 407 Tertiary injectants
In general— Section 193 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(d) Exception for taxpayer with gross receipts in excess of $50,000,000
“(1) In general—Subsection (a) shall not apply to any taxpayer which has aggregate gross receipts for the taxable year in excess of $50,000,000.
“(2) Aggregation rule—For purposes of paragraph (1), all persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person.”
Effective date— The amendment made by this section shall apply to expenses incurred after December 31, 2012.
Sec. 408 Passive activity losses and credits limited
Rules relating to working interests in oil and gas property— Paragraph (3) of section 469(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(C) Exception for taxpayer with gross receipts in excess of $50,000,000
“(i) In general—Subparagraph (A) shall not apply to any taxpayer which has aggregate gross receipts for the taxable year in excess of $50,000,000.
“(ii) Aggregation rule—For purposes of clause (i), all persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person.”
Effective date— The amendment made by this section shall apply to taxable years beginning after December 31, 2012.
Sec. 409 Income attributable to domestic production activities
Denial of deduction— Paragraph (4) of section 199(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
“(E) Special rule for certain oil and gas income—In the case of any taxpayer who is a major integrated oil company (as defined in section 167(h)) for the taxable year, the term “domestic production gross receipts” shall not include gross receipts from the production, transportation, or distribution of oil, natural gas, or any primary product (within the meaning of subsection (d)(9)) thereof.”
Effective date— The amendment made by this section shall apply to taxable years beginning after December 31, 2012.
Sec. 410 Prohibition on using last-in, first-out accounting for major integrated oil companies
In general— Section 472 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(h) Major integrated oil companies—Notwithstanding any other provision of this section, a major integrated oil company (as defined in section 167(h)) may not use the method provided in subsection (b) in inventorying of any goods.”
Effective date and special rule—
In general— The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2012.
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—
such change shall be treated as initiated by the taxpayer,
such change shall be treated as made with the consent of the Secretary of the Treasury, and
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. 411 Modifications of foreign tax credit rules applicable to dual capacity taxpayers
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 major integrated oil companies which are dual capacity taxpayers
“(1) General rule—Notwithstanding any other provision of this chapter, any amount paid or accrued by a dual capacity taxpayer which is a major integrated oil company (as defined in section 167(h)) to a foreign country or possession of the United States for any period shall not be considered a tax—
“(A) if, for such period, the foreign country or possession does not impose a generally applicable income tax, or
“(B) to the extent such amount exceeds the amount (determined in accordance with regulations) which—
“(i) is paid by such dual capacity taxpayer pursuant to the generally applicable income tax imposed by the country or possession, or
“(ii) would be paid if the generally applicable income tax imposed by the country or possession were applicable to such 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.
“(3) Generally applicable income tax—For purposes of this subsection—
“(A) In general—The term “generally applicable income tax” means an income tax (or a series of income taxes) which is generally imposed under the laws of a foreign country or possession on income derived from the conduct of a trade or business within such country or possession.
“(B) Exceptions—Such term shall not include a tax unless it has substantial application, by its terms and in practice, to—
“(i) persons who are not dual capacity taxpayers, and
“(ii) persons who are citizens or residents of the foreign country or possession.”
Effective date—
In general— The amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after December 31, 2012.
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.