A bill that would give tax relief to small and mid-sized oil and gas producers in Oklahoma has been introduced by Oklahoma U.S. Sen. James Lankford and Senators from Wyoming, Montana and South Carolina.
It was a move designed to counter Democrats and their effort to increase taxes on the oil and gas industry which critics say led to higher energy costs for America’s consumers.
Lankford was joined by Senators John Barrasso (R-WY), Steve Daines (R-MT), and Tim Scott (R-SC) to introduce the Promoting Domestic Energy Production Act, which would allow companies to consider intangible drilling costs (IDCs) when calculating taxable income.
IDCs allow oil and natural gas companies to recover their intangible costs more quickly, freeing up funds to reinvest in development, resulting in more jobs. This bill will provide targeted relief for the small and mid-sized oil and gas producers across the state of Oklahoma.
The companion bill is being led in the House of Representatives by Reps. Mike Carey (R-OH) and Vicente Gonzalez (D-TX).
“If you own a restaurant, a repair shop or a hardware store, you can deduct your normal business expenses,” said Lankford. “But the Democrats’ so-called Inflation Reduction Act attacked oil and gas companies by taking away their ability to deduct normal business expenses.”
He said the result of the tax increase has been “higher energy costs for Americans” and claimed it was cleary the plan of the Biden administration.
“The Biden Administration celebrates higher energy costs as they push their progressive climate-change agenda. Higher energy prices hurt every family and drive up prices for everything we buy. This bill will restore basic tax fairness to energy businesses, encourage stable energy production and lower energy prices for everyone.”
Wyoming Sen. barrasso made similar charges.
“The Democrats’ reckless tax and spending bill created disastrous tax policies that threaten job creation, investment, and economic growth. And their attack on American energy producers is stifling access to affordable and reliable energy for families across the country.”
Sen. Daines from Montana said the Biden administration along with Senate Democrats are dead-set on shutting down domestic energy production.
“Their penalty on drilling costs is killing jobs and penalizing energy companies in Montana and across the country and therefore it must be reversed.”
Lankford originally offered a similar cost recovery allowance as an amendment in 2022. After the Senate failed to pass his amendment, the Inflation Reduction Act ultimately imposed a Book Minimum Tax on American Companies and unfairly targeted oil and gas production by disallowing Intangible Drilling Costs for accelerated cost recovery. Lankford supports a full repeal of this tax and is a sponsor of Barrasso’s Book Minimum Tax Repeal Act, which would undo this harmful policy implemented by the Biden Administration.
Source: press release