S.1026 - Tar Sands Tax Loophole Elimination Act (119th Congress)
Summary
The Tar Sands Tax Loophole Elimination Act (S.1026) 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. This clarification seeks to close a perceived loophole that allows tar sands-derived products to avoid this tax. The bill also grants regulatory authority to the Secretary to address other types of crude oil and petroleum products, ensuring consistent classification and taxation.
Expected Effects
The primary effect of this bill would be to subject tar sands-derived products to the federal excise tax on petroleum, potentially increasing government revenue. This could also lead to increased costs for companies producing or using these products. Additionally, the regulatory authority granted to the Secretary could result in further adjustments to the classification and taxation of various fuel feedstocks and finished fuel products.
Potential Benefits
- Increased government revenue through the collection of excise taxes on tar sands-derived products.
- A more level playing field for different types of crude oil producers by removing a perceived tax advantage for tar sands.
- Potential for environmental benefits if the increased cost of tar sands products discourages their use.
- Greater regulatory flexibility to address emerging issues related to crude oil and petroleum product classification.
- Alignment with the Oil Pollution Act of 1990, potentially reducing environmental risks associated with fuel discharges.
Potential Disadvantages
- Increased costs for companies producing or using tar sands-derived products, potentially impacting consumers.
- Potential for job losses in the tar sands industry if the increased tax burden makes these operations less competitive.
- Possible legal challenges to the regulatory authority granted to the Secretary.
- Risk of unintended consequences if the new regulations are poorly designed or implemented.
- Could increase energy prices.
Constitutional Alignment
The bill appears to align with the constitutional authority of Congress to levy taxes and regulate interstate commerce (Article I, Section 8). The clarification of what constitutes "crude oil" for tax purposes falls within the purview of Congress's power to define and collect taxes. The delegation of regulatory authority to the Secretary 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).