New Legislation Will Close Tax Loopholes For Drilling, Foreign Tax Schemes

New Legislation Will Close Tax Loopholes For Drilling, Foreign Tax Schemes

Step to Recoup More than $20 Billion for Taxpayers

Washington - On Valentine's Day, U.S. Senator Robert Menendez (D-NJ) today delivered a message to big oil companies - "Your sweetheart tax deals are over." Menendez, a member of the Senate Finance Committee, called for legislation to close tax loopholes sending billions of dollars to oil companies.

Menendez estimates that closing these loopholes will amount to more than $20 billion over ten years for taxpayers. Menendez's legislation comes on the heels of President Obama calling for the oil company loopholes to be closed - a call that is expected to be reflected in the president's budget proposal tomorrow.

The legislation, co-sponsored by Senator Frank Lautenberg (D-NJ) among others, targets a series of loopholes related to drilling activities and revenues, as well as foreign tax schemes. Over the past decade, BP, Exxon, Chevron, Shell, and Conoco have combined profits of just under $1 trillion. In 2010 alone, these companies made over $75 billion, and this includes the $17 billion BP has spent trying to clean up their spill in the Gulf of Mexico.

Senator Bob Menendez said, "This Valentine's Day, I have a clear message for big oil - your sweetheart deals are over. For too long oil companies have padded their profits at taxpayer expense. We're going to close these outrageous tax loopholes and get back to investing in the good-paying green jobs of the future."

MENENDEZ'S PLAN TO CLOSE TAX BREAKS FOR OIL COMPANIES

• Recoup royalties that oil companies avoided paying for oil and gas production on public lands
• Prevent oil companies from manipulating the rules on foreign taxes to avoid paying full corporate taxes in the U.S.
• End a number of tax deductions and relief afforded to the oil industry, such as the deductions for classifying oil production as manufacturing, for the depletion of oil and gas through drilling and for costs associated with preparing to drill.

The Close Big Oil Tax Loopholes Act is based upon provisions new efforts to stop subsidizing polluting industries. The bill contains important safeguards to allow refineries and oil companies with yearly revenues of less than $100 million to retain certain tax credits and deductions.

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