Economic Recovery Act provides planning opportunities for oil and gas industry

Journal Article · Mon Oct 19 04:00:00 EDT 1981 · Oil Gas J.; (United States)

OSTI ID:5205041

Braden, J R; Morris, J R

The Economic Recovery Act of 1981 signed into law on August 13, 1981, contains several provisions which should provide tax benefits and tax planning opportunities for the oil and gas industry. This study discusses the significant provisions of the new legislation affecting the industry. The act reduces the Windfall Profit Tax rate on production after 1981 from properties otherwise classified as newly discovered. The existing 30% tax rate will be scaled down to a 15% rate for production in calendar 1986 and subsequent years. Projected tax savings through fiscal year 1986 resulting from these reduced tax rates are estimated to be approximately $3.2 billion. Other production currently classified as tier 3 oil, such as heavy and incremental tertiary oil, remains subject to the 30% rate. Beginning in 1983, the new legislation exempts crude oil stripper well production attributable to working interests held by independent producers from the Windfall Profit Tax. Certain royalty owners will be eligible to claim a maximum $2500 tax credit or refund with respect to Windfall Profit Taxes on calendar year 1981 crude oil production. In 1982, the royalty owner credit provisions are eliminated and replaced with a limited exemption. The act provides for cumulative reductions in individual tax rates of approximately 23%.

• OSTI ID: 5205041
• Journal Information: Oil Gas J.; (United States), Journal Name: Oil Gas J.; (United States) Vol. 79:42; ISSN OIGJA
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
021000* -- Petroleum-- Legislation & Regulations
03 NATURAL GAS
031000 -- Natural Gas-- Legislation & Regulations
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
293000 -- Energy Planning & Policy-- Policy
Legislation
& Regulation
294002 -- Energy Planning & Policy-- Petroleum
294003 -- Energy Planning & Policy-- Natural Gas
ECONOMIC IMPACT
ECONOMIC RECOVERY TAX ACT
ENERGY SOURCES
FOSSIL FUELS
FUELS
INDUSTRY
LAWS
NATURAL GAS INDUSTRY
PETROLEUM
PETROLEUM INDUSTRY
PRODUCTION
TAX CREDITS
TAXES
WINDFALL PROFITS TAX