Windfall Profit Tax: a primer on the net income limitation
The Windfall Profits Tax (WPT) combines the attributes of a severance and an excess profits tax, with one of the most important features of the latter being the net income limitation contained in Internal Revenue Code Section 4988(b). The net income limitation ensures that high-cost properties are not prematurely abandoned because of federal taxes by limiting the WPT base to 90% of the net income attributable to the barrel of taxable crude oil. The author reviews the details of the rules which determine the net income limitation and the underlying principles of those rules. There is special consideration of the similarities and differences between gross income from the property and the removal price of taxable crude oil. Other sections deal with special allocations of income and expenses, accounting methods, and the need for tax simplification.
- Research Organization:
- Baker and Botts, Washington, DC
- OSTI ID:
- 5783754
- Journal Information:
- Oil Gas Tax Q.; (United States), Journal Name: Oil Gas Tax Q.; (United States) Vol. 34:3; ISSN OGTQD
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
021000* -- Petroleum-- Legislation & Regulations
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294002 -- Energy Planning & Policy-- Petroleum
ACCOUNTING
ECONOMIC POLICY
GOVERNMENT POLICIES
INCOME
INDUSTRY
LAWS
LEGAL ASPECTS
PETROLEUM INDUSTRY
PROFITS
SEVERANCE TAX
TAX LAWS
TAXES
WINDFALL PROFITS TAX