The US House of Representatives approved tax reform legislation Nov. 16 in a 227-205 vote as 11 Republicans joined Democrats in opposing the bill.
“We’ve got a long road ahead of us, and we have a timeline to get this done by the end of the year,” Speaker Paul D. Ryan (R-Wis.) said after the vote.
H.R. 1 included provisions that would reduce the federal corporate tax rate to a flat 20% from 35% (25% for personal services corporations), limit deductibility of net interest expenses to 30% of a business’s adjustable taxable income, modify or repeal various energy-related deductions, and modify taxation of foreign income.
The bill’s energy-related provisions would repeal the enhanced oil recovery (EOR) credit and the credit for oil and gas produced from marginal wells. Darlene Wallace, chairman of the National Stripper Well Association (NSWA) and president of Columbus Oil Co. in Seminole, Okla., told OGJ on Nov. 17 that she was not surprised.
“When the Senate and House tax committees began looking for ways to cut alternative energy subsidies and provisions for wind, solar, and biofuels, they knew they would have to make some concession with oil and gas,” she said.
When Wallace, NSWA lobbyist Aindrui Colgan, and several others met with committee members in September, they learned that percentage depletion also might be a target in addition to the EOR and marginal well production credits, Wallace said.
“We discussed all three provisions with them and got commitments from most of the members we met that percentage depletion would be preserved. When the House voted on its tax-reform bill, repeals of the other two credits were included, but the current percentage depletion rate was kept intact, which is a win for all of us,” she said.
RESUMEN: Reducen impuestos en USA del 35% al 20% en pozos con extracción marginal y
en proyectos de recuperación mejorada.