Home / News / IADC backs industry fight against tax increases

 It’s a simple equation: Increased taxes = less investment = less production. Which is why IADC is working, through its alliance with industry groups like API and IPAA, to oppose a budget request by the Obama Administration that would essentially repeal Bush-era tax breaks for the oil and gas industry. This could mean a $30 billion-plus tax increase on American energy producers, most of whom are small businesses.

According to the IPAA, US independent producers develop 90% of US wells and produce 82% of the country’s natural gas and 68% of oil. Increasing taxes on these companies would strip essential capital from new investments, therefore reducing production. And because oil and gas royalties already account for the second-largest income source for the US Treasury, less production would also result in less income for federal and state governments.

IADC backs industry fight against tax increases

Some areas of impact would be:

  • • Intangible drilling and development costs.
  • • Percentage depletion.
  • • Geological and geophysical amortization.
  • • Marginal well tax credit.
  • • Enhanced oil recovery tax credit.
  • • Manufacturing tax deduction.
  • • Excise tax on Gulf of Mexico production.
  • • Passive loss exception for working interests in oil and gas properties.

IADC is cooperating with industry grassroots programs designed to encourage greater involvement and higher visibility of the issues, as well as one-on-one relationships with congressional representatives. The association has signed on to related testimony and continues to participate in the IPAA legislative alert system, which generates letters to individual members of congress. IADC and IPAA have shared database information for the alert system since its inception.

For more information, contact Brian Petty, IADC senior vice president – government affairs at +1/202-293-0670 or by e-mail.

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