H.R.2224 - Tar Sands Tax Loophole Elimination Act (119th Congress)
Summary
H.R.2224, the "Tar Sands Tax Loophole Elimination Act," aims to amend the Internal Revenue Code of 1986 to clarify that products derived from tar sands are considered crude oil for the purposes of the federal excise tax on petroleum. The bill seeks to close a perceived loophole by explicitly including oil derived from tar sands and other unconventional sources in the definition of crude oil. This would subject these products to the same excise taxes as traditional crude oil.
Expected Effects
If enacted, the bill would likely increase the tax burden on companies that produce or import oil derived from tar sands. This could lead to increased costs for these companies and potentially higher prices for consumers. The bill also grants the Secretary of the Treasury regulatory authority to classify other fuel feedstocks and finished fuel products as crude oil or petroleum products subject to tax, provided they meet certain criteria related to environmental risk and commercial quantity.
Potential Benefits
- Increased tax revenue for the federal government.
- Leveling the playing field between traditional crude oil producers and those extracting oil from tar sands.
- Potential for increased investment in cleaner energy sources as tar sands become less economically attractive.
- Reduced environmental risks associated with the transportation of fuel feedstocks and finished fuel products due to regulatory oversight.
- Addresses potential inconsistencies in the definition of oil under different federal laws.
Potential Disadvantages
- Potential increase in energy prices for consumers.
- Negative impact on the profitability of companies involved in tar sands extraction and processing.
- Possible job losses in the tar sands industry.
- Increased regulatory burden on the energy sector.
- Potential for legal challenges regarding the scope of the Secretary's regulatory authority.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the constitutional power of Congress to levy taxes, as outlined in Article I, Section 8, Clause 1. The clarification of what constitutes "crude oil" for excise tax purposes falls within the scope of Congress's authority to regulate commerce and generate revenue. The delegation of regulatory authority to the Secretary of the Treasury is also a common practice, provided that Congress sets clear standards and guidelines for the exercise of that authority.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).