Economic Recovery Tax Act of 1981 and the oil and gas industry

Journal Article · Tue Dec 01 04:00:00 EST 1981 · Oil Gas Tax Q.; (United States)

OSTI ID:5760278

Conrad, S V; Howard, J W

The Economic Recovery Tax Act of 1981 will not provide a tax windfall to the oil and gas industry. There will be a shifting of the windfall profit tax burden among the industry because of the royalty owner exemption, the stripper exemption, and reduced rates for newly discovered oil. Permanent savings may be minimal because of the delayed phaseout of the Windfall Profit Tax (WPT). The method of applying the royalty exemption to specific barrels may be difficult, and administrative compliance will likely be cumbersome. The potential benefits of the accelerated cost recovery system (ACRS) will be difficult to evaluate and many taxpayers will likely utilize the unit-of-production method of depreciation. However, some planning opportunities will exist particularly in the area of prepayments for individual taxpayers and maximizing percentage depletion and windfall profit tax refunds resulting from the net income limitation after considering the effect of ACRS.

• Research Organization: Deloitte Haskins and Sells, Denver, CO
• OSTI ID: 5760278
• Journal Information: Oil Gas Tax Q.; (United States), Journal Name: Oil Gas Tax Q.; (United States) Vol. 30:2; ISSN OGTQD
• 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
294002* -- Energy Planning & Policy-- Petroleum
294003 -- Energy Planning & Policy-- Natural Gas
ECONOMIC IMPACT
ECONOMIC RECOVERY TAX ACT
IMPLEMENTATION
INDUSTRY
LAWS
NATURAL GAS INDUSTRY
PETROLEUM INDUSTRY
TAXES