Order Code IB10054
CRS Issue Brief for Congress
Received through the CRS Web
Energy Tax Policy
Updated November 9, 2000
Salvatore Lazzari
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Introduction
Background
Energy Tax Policy from 1918-1970: Promoting Oil and Gas
Energy Tax Policy During the 1970s: Conservation and Alternative Fuels
Reagan’s Free-Market Energy Tax Policy
Energy Tax Policy After Reagan
Current Legislative Proposals
Energy Tax Proposals in The President’s FY2001 Budget
Energy Efficiency in Residential and Commercial Buildings
Energy Efficiency in Commercial and Industrial Energy Use
Energy Efficiency in the Transportation Sector
Liberalization of the Renewable Electricity Production Tax Credit
Moratorium on Motor Fuel Excise Taxes
Brief History of Motor Fuels Taxes
Legislative Proposals
LEGISLATION


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Energy Tax Policy
SUMMARY
Congressional interest this year in energy
ultimate concern is to reduce the demand for
tax policy has focused largely on S. 2285 and
imported oil, energy tax policy is being viewed
similar proposals for a possible moratorium on
as a tool for achieving environmental and
the payment of the 18.4¢/gallon gasoline tax,
fiscal objectives. The current posture of energy
making up lost revenues to the Highway Trust
tax policy is weighted toward energy conser-
Fund from the general fund. Legislative inter-
vation — particularly petroleum in transporta-
est is also now focusing on broader energy tax
tion — and alternative fuels supply.
policy issues – domestic production, import
dependence, energy security, as well as alter-
The Clinton Administration’s energy tax
native fuels, and energy efficiency. S. 2557,
policy is, as before, focused on reducing the
the Republican leadership’s broadly-based
demand for petroleum by encouraging energy
energy bill, and S. 3152 included many such
efficiency and providing incentives to promote
provisions.
the supply of alternative fuels and the demand
for technologies that use these fuels. How-
Historically, federal energy tax policy
ever, the Administration is emphasizing the
promoted the supply of oil and gas. However,
environmental benefits from reducing green-
the 1970s witnessed 1) a significant cutback in
house gases and addressing possible global
the oil and gas industry’s tax preferences, 2)
climate change.
the imposition of new excise taxes on oil, and
3) the introduction of numerous tax prefer-
The Clinton Administration’s FY2001
ences for energy conservation, the develop-
budget proposes several tax subsidies for
ment of alternative fuels, and the commercial-
energy conservation and alternative fuels: 1)
ization of the technologies for producing these
solar energy tax credits very similar to those
fuels (renewables such as solar, wind, and
that expired in 1985; 2) a new tax credit for
biomass, and non-conventional fossil fuels
the cost of a new home that would meet cer-
such as shale oil and coalbed methane).
tain energy efficiency standards; 3) a tax credit
for advanced energy-efficient equipment for
The Reagan Administration, using a free-
space heating and cooling and hot water heat-
market approach, advocated repeal of the
ers; 4) more accelerated depreciation deduc-
windfall profit tax on oil and the repeal or
tions for distributed power technologies,
phase-out of most energy tax preferences —
including small electrical generating systems
for oil and gas, as well as alternative fuels.
(self-generated power), and for co-generation
Due to the combined effects of the Economic
systems; 5) a new tax credit for the purchase
Recovery Tax Act and the energy tax subsidies
of hybrid vehicles – cars, minivans, sport utility
that had not been repealed, which together
vehicles, and pickups – that run alternately on
created negative effective tax rates in some
a consumable fuel (such as gasoline) and a
cases, the actual energy tax policy differed
rechargeable energy storage system (such as
from the stated policy.
an electric battery); 6) extension of the present
$4,000 tax credit for electric vehicles, which
The Bush and Clinton years witnessed a
would otherwise terminate on 2004; and 7) a
return to a much more activist energy tax
liberalization of the renewable electricity credit
policy, targeted, as in the 1970s, to energy
from such wind systems and closed-loop
conservation and alternative fuels. While the
biomass systems.
Congressional Research Service ˜ The Library of Congress


MOST RECENT DEVELOPMENTS
On October 27, the Senate postponed a vote on the Taxpayer Relief Act of 2000 (H.R.
5542, but attached to H.R. 2614) due to a threatened Presidential veto. This bill included
a repeal of the 4.3¢ per gallon general fund excise tax on rail diesel and fuels used in barges
on inland waterways. The Senate’s tax cut proposal (S. 3152) included several other energy
tax provisions to stimulate the supply of crude oil, improve energy efficiency, and increase
the demand for renewable fuels (provisions similar to those in S. 2557, the Republican
leadership’s broadly based energy bill).

In response particularly to the spike in petroleum product prices in the spring and
summer of this year, several bills have been introduced in the Senate to temporarily reduce
the federal excise tax on gasoline and diesel fuel, and other special motor fuels. Senate
floor action occurred on April 11 on S. 2285, by Senators Lott and Murkowski, to
temporarily reduce most fuel taxes by either 4.3¢ or by all but the 0.1¢ component of these
taxes (i.e., by 18.3¢ for gasoline, 24.3¢ for diesel fuel and kerosene, and 4.3¢ for aviation
fuel). On that day the Senate failed to invoke cloture by a vote of 43-56. On April 6 a non-
binding amendment to the FY2001 budget resolution (S.Con.Res. 101) expressing the sense
of the Senate that the resolution should not assume a reduction in fuel taxes as proposed in
S. 2285 was approved by a vote of 65-35. These actions seem to dim the hope of enacting
this legislation, although the bill has not officially been withdrawn.

On December 17, 1999, the President signed H.R. 1180 (P.L. 106-170) the Ticket to
Work and Work Incentives Improvement Act of 1999. Title V of the law, the Tax Relief and
Extension Act of 1999, extended and liberalized the renewable electricity production tax
credit, and renewed the suspension of the net income limitation for the percentage depletion
allowance for marginal oil and gas wells.

In the FY2001 budget request, the President incorporated several energy tax incentives
for more energy-efficient buildings and equipment, and for the supply of energy from
renewables such as solar and biomass.

BACKGROUND AND ANALYSIS
Introduction
Virtually every major tax bill introduced in every Congress, and many of the relatively
minor tax bills, propose to alter the tax treatment of the energy industries. For example, the
Republican tax cut bill of 1999 (H.R.2488), which was vetoed, proposed tax cuts for oil and
gas, and for alternative fuels. Growing dependence on imported petroleum and the problem
of air pollution, and possible global climate change from the combustion of fossil fuels, have
generated additional proposals to alter energy taxes. For example, the President’s current
budget, and his last two budgets, included proposals to significantly expand existing tax
subsidies for energy conservation and alternative fuels. More recently, proposals have been
made to reduce fuel taxes to offset rising petroleum prices, as well as to reinstate prior
windfall profit taxes to reclaim any excess profits from these higher prices. And the current
crisis in the energy markets has prompted the Senate to schedule consideration of S.2557,
which includes among its many provisions many of the tax provisions in the vetoed bill H.R.
2488. This issue brief discusses the history of energy tax policy and some of the current

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energy tax proposals. (For a general economic analysis of energy tax policy, see CRS Report
RL30406, Energy Tax Policy: An Economic Analysis.)
Background
The history of federal energy tax policy – using the tax system to achieve energy policy
objectives – is divided into four eras: the oil and gas period from 1916 to 1970, the energy
crisis period of the 1970s, the free-market era of the Reagan Administration, and the post-
Reagan era, including recent energy tax proposals.
Energy Tax Policy from 1918-1970: Promoting Oil and Gas
Historically, federal energy tax policy was focused on increasing domestic oil and gas
reserves and production; there were no tax breaks for energy conservation or for supply or
demand for alternative fuels. Two oil/gas tax code provisions embodied this policy: 1)
expensing of intangible drilling costs (IDC’s) and dry hole costs, which was introduced in
1916, and 2) the percentage depletion allowance, first enacted in 1926 (coal was added in
1932). Expensing of IDC’s (such as labor costs, material costs, supplies, and repairs
associated with the drilling of a well) gave oil and gas producers the benefit of fully deducting
from the first year’s income (“writing off”) a significant portion of the total costs of bringing
a well into production, costs that would otherwise (i.e., in theory and under standard,
accepted tax accounting methods) be capitalized (i.e., written off during the life of the well
as income is earned). Expensing accelerates tax deductions, defers tax liability, and
encourages oil and gas prospecting, drilling, and the development of reserves. The percentage
depletion allowance for oil and gas permitted oil and gas producers to claim 27.5% of revenue
as a deduction for the cost of exhaustion or depletion of the deposit, allowing deductions in
excess of capital investment (i.e, in excess of adjusted cost depletion) — the economically
neutral method of capital recovery for the extractive industries. Percentage depletion
encourages faster mineral development than cost depletion.
These and other tax subsidies discussed later (e.g., the special exemption from the
passive loss limitation rules and special tax credits) reduced marginal effective tax rates in the
oil and gas industries, reduced production costs, and increased investments in locating
reserves (increased exploration). They also led to more profitable production and some
acceleration of oil and gas production (increased rate of extraction). Such subsidies tend to
channel resources into these activities that otherwise would be used for oil and gas activities
abroad or for other economic activities in the United States; they cause an accelerated
depletion of the resource (i.e., the tax subsidies provide an unambiguous incentive to deplete
sooner rather than later). Relatively low oil prices encouraged petroleum consumption (as
opposed to conservation) and inhibited the development of alternative fuels. Oil and gas
production increased from 16% of total U.S. energy production in 1920 to 71.1% of total
energy production in 1970 (the peak year).
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Energy Tax Policy During the 1970s: Conservation and Alternative Fuels
Three developments during the 1970s caused a dramatic change in federal energy tax
policy. First, the revenue losses associated with the oil and gas tax preferences – since their
inception, cumulative foregone revenues totaled in the tens of billions of dollars – became
increasingly hard to justify in the face of a progressively worsening fiscal picture, and in view
of the long-standing economic arguments against the special tax treatment for oil and gas.
Second, heightened awareness of environmental pollution and concern for environmental
degradation, and the increased importance of distributional issues in policy formulation (i.e.,
equity and fairness), lost the domestic oil and gas industry much political support. Thus, it
became more difficult to justify percentage depletion and other similar subsidies, largely
claimed by wealthy individuals and big vertically integrated oil companies. More importantly,
during the 1970s there were two energy crises: the oil embargo of 1973 – also known as the
first oil shock – and the Iranian Revolution in 1979, which focused policymakers’ attention
on the alleged “failures” of the energy markets and the need for greater government
intervention.
Thus, during the 1970s there was a dramatic shift in energy policy objectives. Instead
of expanding the supply of oil and gas, the objective of energy tax policy became a reduction
in the demand for conventional oil and gas. Policy would focus on three general ways to
reduce the demand for conventional fuels (i.e., “conserve energy”): 1) through a direct
demand response (i.e., curbing energy use through higher prices, and reduced service or utility
levels by reducing the number of miles driven or turning down thermostats in homes during
the winter, etc.); 2) through substitution of more energy-efficient for less energy-efficient
technologies (i.e., reduced energy demand through an increased demand for more energy-
efficient houses, vehicles, industrial equipment and other energy-using capital goods); and 3)
through an increased supply of alternative fuels (renewables such as solar, wind, biomass,
ethanol fuel, and non-conventional fossil fuels such as shale oil, and coalbed methane), and
stimulating investment in, and demand for, technologies that used these alternative sources
of energy.
During the 1970s there was also a significant increase in the number of energy laws and
regulations, such as the CAFÉ (Corporate Average Fuel Economy) standards to reduce
transportation fuel use, and other interventions through the budget and the credit markets.
This included some of the most extensive energy tax legislation ever enacted. Three broad
actions through the tax code were taken to execute the new energy tax policy during the
1970s: First, the oil industry's two major tax preferences — expensing and percentage
depletion — were significantly reduced, particularly the percentage depletion allowance,
which was 1) completely eliminated for the major integrated oil companies (which produce
about 75% of all the oil in the United States), and 2) reduced for the remaining producers.
Other oil and gas tax benefits were also cut back during this period. For example, oil/and gas-
fired boilers could no longer qualify for accelerated depreciation as a result of the Energy Tax
Act of 1978 (as discussed below).
The second broad policy action was the imposition of several new excise taxes on oil and
gas (and later coal). Chief among these was the windfall profit tax (WPT) on oil first
introduced in 1970 but not actually enacted until early 1980 (P.L. 96-223). The WPT (which
was repealed in 1988) imposed an excise tax of 15% to 70% on the difference between the
market price of oil and a predetermined (adjusted) base price. This tax was part of a political
compromise that decontrolled oil prices (between 1971 and 1980 oil prices were controlled
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under President Nixon’s Economic Stabilization Act of 1970 – the so-called “wage-price
freeze”). Another, but relatively small, excise tax on petroleum was instituted in 1980: the
environmental excise tax on crude oil received at a U.S. refinery. This tax, which was part
of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(P.L. 96-510), otherwise known as the "Superfund" program, was designed to charge oil
refineries for the cost of releasing any hazardous materials which resulted from the refining
of crude oil. The tax rate was set initially at 0.79¢ ($0.0079) per barrel, and was subsequently
raised to 9.7¢ per barrel. This tax expired at the end of 1995 but there is legislation to
reinstate it as part of Superfund reauthorization. (See CRS Issue Brief IB10011.)
The third broad action taken during the 1970s that reflected the new energy tax policy
objectives was the introduction of numerous tax preferences specifically targeted for energy
conservation, the development of the supply of alternative fuels (renewable and non-
conventional fuels), and the commercialization of energy efficiency and alternative fuels
technologies. Most of these new tax subsidies were introduced as part of the Energy Tax Act
of 1978 (ETA, P.L. 95-618). These subsidies were then expanded under the WPT, which
introduced additional new energy tax subsidies. The following list describes these:
! The Residential and Business Energy Tax Credits. The ETA provided
income tax credits for homeowners and businesses that invested in a variety
of energy conservation products (e.g., insulation and other
energy–conserving components) and for solar and wind energy equipment
installed in a principal home or a business. The business energy tax credits
were 10% to 15% of the investment in conservation or alternative fuels
technologies such as synthetic fuels, solar, wind, geothermal, and biomass.
These tax credits were also expanded as part of the WPT but they generally
expired (except for business use of solar and geothermal technologies) as
scheduled either in 1982 or 1985. The President’s FY2001 budget includes
a solar credit that is very similar to the 1978 residential energy tax credits
(see "Tax Credits for Solar Energy Equipment," hereafter). S. 2557 would
reinstate the residential energy tax credit for solar equipment, including
rooftop panes, that heats water or generates electricity directly (photovoltaic
systems).
! Tax Subsidies for Alcohol Fuels. The ETA also introduced the excise tax
exemption for gasohol, currently at 5.4¢ per gallon (out of a gasoline tax of
18.4¢/gal.). Subsequent legislation extended the exemption and introduced
the alcohol fuels "blenders" tax credits, and the 10¢/gal., small ethanol
producers tax credit. The 1998 Transportation Equity Act (P.L. 105-178)
extended the exemption at reduced rates.
! The Gas Guzzler Tax. The ETA created a federal tax on “gas guzzlers,” a
graduated excise tax on the sale of vehicles that do not meet the Corporate
Average Fuel Economy (CAFÉ) standards established by the Environmental
Protection Agency. The tax rate currently ranges from $1,000 for a vehicle
rated between 21.5 and 22.5 MPG (miles per gallon) to $7,700 for a vehicle
rated at less than 12.5 MPG. This tax is still in effect.
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! Percentage Depletion for Geothermal. The ETA made geothermal deposits
eligible for the percentage depletion allowance, at the rate of 22%. Currently
the rate is 15%.
! The Alternative Fuels Production Tax Credit. The 1980 WPT included a
production tax credit to stimulate the supply of selected unconventional
fuels: oil produced from shale or tar sands, gas produced from either geo-
pressurized brine, Devonian shale, tight formations, and coalbed methane,
gas from biomass, and synthetic fuels from coal. Adjusted for inflation, this
credit, which is still in effect for wells, mines, or plants placed in service by
June 30, 1998 (for coal and biomass facilities) and December 31, 1991 (for
all other facilities and wells), was $6.23 per barrel of liquid fuels and about
$1.00 per thousand cubic feet (MCF) of gas in 1999.
! Tax-Exempt Interest on Industrial Development Bonds. The WPT made
facilities for producing fuels from solid waste exempt from federal taxation
of interest on industrial development bonds (IDBs). This exemption was for
the benefit of the development of alcohol fuels produced from biomass, for
solid-waste-to-energy facilities, for hydroelectric facilities, and for facilities
for producing renewable energy. IDBs, which provide significant benefits to
state and local electric utilities (public power), had become a popular source
of financing for renewable energy projects.
Reagan’s Free-Market Energy Tax Policy
The Reagan era, the period from 1980-1988, witnessed the first attempt to create a free-
market energy tax policy, i.e., an energy tax policy founded on the principles of neutrality,
efficiency, and the removal of regulatory and tax barriers to efficient markets. This was a
departure from the interventionist energy policies prevalent up to the 1980s, which were
founded either on the alleged failures of the energy markets (the 1970s) or on the social
benefits, including the defense benefits, from having a healthy oil industry (1916-1970).
Reagan’s free-market views were well known prior to his election. During the 1980
Presidential campaign, he frequently proposed repeal of the WPT, the deregulation of energy
prices, and the minimization of government intervention, including reduced spending and
taxes. His Administration’s energy tax policy was professed more formally in several energy
and tax policy studies, including its 1981 National Energy Policy Plan and the 1983 update
to this plan; it culminated in a 1984 Treasury study on tax reform, which proposed
fundamental reforms of federal energy tax policy. The Reagan Administration opposed using
the tax law to promote either oil and gas development, energy conservation, or the supply of
alternative fuels.
The Reagan Administration believed that the responsibility for commercializing
conservation and alternative energy technologies rested with the private sector and that high
oil prices would be ample encouragement for the development of alternative energy resources.
This view was facilitated by the regime of high oil prices in 1981 and 1982. High oil prices
in themselves created conservation incentives, stimulated oil and gas production, and rendered
tax breaks for alternative resource less effective as a policy tool. The Administration also
proposed to remove any artificial barriers to the development of renewable resources.
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In terms of actual legislation, many of the Reagan Administration’s objectives were
realized. In 1982, the business energy tax credits on most types of non-renewable
technologies – those enacted under the ETA of 1978 – were allowed to expire as scheduled;
other business credits and the residential energy tax credits were allowed to expire at the end
of 1985, also as scheduled. Only the tax credits for business solar, geothermal, ocean thermal
and biomass technologies were extended. And as noted, the WPT was repealed, but not until
1988, the end of the Reagan term.
The Administration’s other energy tax policy proposals, however, were not adopted.
The primary tax benefits for the oil/gas investments were not eliminated, although they were
pared back as part of the Tax Reform Act (TRA) of 1986. For instance, expensing of IDCs
was retained, but there was another cutback for integrated oil producers, who were required
to amortize 30% of their intangible drilling costs over 5 years, as compared with 20% over
a 3-year period. In addition, expensing was no longer available for IDCs incurred in foreign
countries. The TRA specified that IDCs incurred abroad had to be either amortized over 10
years or added to the basis for cost depletion.
With respect to percentage depletion, the TRA provided that percentage depletion would
not apply to lease bonuses, advance royalties, or any other payments made without regard to
actual production from the property. This amendment applied to geothermal as well as oil and
gas properties. Another section of TRA denied capital gains treatment on certain dispositions
of interest in oil and gas property; this also applies to geothermal property.
Finally, the TRA of 1986 replaced the old minimum taxes with a new alternative
minimum tax that in effect placed limits on the regular tax benefits to oil/gas producers from
the expensing of IDCs and the percentage depletion allowance. However, in an effort to
mitigate any burdensome effects of this new tax, the expensing deduction was not included
in full as a tax preference item in the new minimum tax. Rather, only the excess of the
deduction above 65% of net income was to be treated as a preference item. In most cases,
investments in oil and gas properties were exempted from the passive loss limitation rules that
were intended to curb tax shelter investments. Thus, a working interest in an oil and gas
property was not treated as a passive activity. This implied that losses and credits derived
from such an activity could be used as a tax shelter to offset the taxpayer's other income
without limitations under the passive loss rules.
Perhaps the key characteristic of the Reagan Administration energy tax policy, however,
was the extent to which its objectives were countered by the Administration’s other tax
policies. While the objective was to create a free-market energy policy, the unintended effects
of the significant liberalization of the depreciation system and reduction in marginal tax rates
— both the result of the Economic Recovery Tax Act of 1981 (ERTA, P.L. 97–34) —
combined with the regular investment tax credit and the business energy investment tax
credits, resulted in negative effective tax rates for investments in many alternative energy
investments such as solar and synthetic fuels. Oil and gas investments, however, were still
favored relative to investments in general, due to the retention of percentage depletion for
independent producers and expensing of intangible drilling costs.
Other energy tax policy developments during the Reagan era were as follows:
! In 1984 the Deficit Reduction Act (P.L. 98-369) made several notable
amendments to federal energy tax laws. First, it prevented the last stage of
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a phased-in reduction in the WPT for newly discovered oil. Second, it
corrected a technical error made in the percentage depletion provision of the
Tax Reform Act of 1975. Finally, and more importantly, the 1984 tax law
extended several of the tax incentives for alcohol fuels: (1) the excise tax
exemption for alcohol fuels mixtures was raised from 5¢ to 6¢ per gallon; (2)
the law retained the prior 9¢-per-gallon exemption for neat alcohol fuels, i.e.,
those that are at least 85% alcohol, derived from alternative substances, but
it provided for a new exemption of 4.5¢ per gallon for alcohol fuels derived
from natural gas; (3) the alcohol "blenders" credit was raised from 50 to 60¢
per gallon; and (4) the duty on alcohol imported for use as a fuel was
increased from 50 to 60¢ per gallon.
! In 1986 two environmental excise taxes were enacted that affected the oil
industry. The first was the 8.2¢-per-barrel excise tax on oil received by
refineries; it was imposed by the Superfund Amendments and
Reauthorization Act of 1986 (P.L. 99-499). There was also an 11.7-per-
barrel tax on imported crude oil and petroleum products to be paid by the
importer. These differential tax rates were ruled to violate the General
Agreements on Tariffs and Trade (GATT), and 1989 legislation (the Steel
Trade Liberalization Program Implementation Act (P.L. 101-221)) corrected
this problem by providing for a uniform rate of 9.7¢ per barrel. This law was
an extension of the original Superfund law of 1980 that imposed the 0.79¢
per barrel oil tax. The original law expired on September 30, 1985. The new
law became effective on January 1, 1987. The second environmental excise
tax was a 1.3¢ per barrel tax on oil imposed as part of the Omnibus Budget
Reconciliation Act of 1986 (P.L. 99-510). This tax would also be imposed
on crude oil received by refineries, as well as on imported and exported
crude oil and petroleum products. The revenues from this tax were to be
allocated to the Oil Spill Liability Trust Fund, created to finance the costs of
cleaning up chemical disposal sites and hazardous waste spills. But, in fact,
no revenues were ever collected from this tax because the authorizing
legislation –– as required by the 1986 law –– was not enacted until 1989.
This is discussed in the next section.
! In addition, the TRA of 1986 reduced the excise tax exemption for "neat"
alcohol fuels, from 9¢ per gallon to 6¢ per gallon. It also permitted alcohol
imported from certain Caribbean countries to enter free of the 60¢-per-gallon
duty. The TRA also repealed the tax-exempt financing provision for alcohol-
producing facilities and for certain steam-generating facilities.
Energy Tax Policy After Reagan
After the Reagan Revolution, several major energy and non-energy laws were enacted
that amended the energy tax laws in several ways, some major:
! Revenue Provisions of the Omnibus Reconciliation Act of 1990. President
Bush's first major tax law included numerous energy tax incentives: 1) for
conservation (and deficit reduction), the law increased the gasoline tax by
5¢/gal. and doubled the gas-guzzler tax; 2) for oil and gas, the law
introduced a 10% tax credit for enhanced oil recovery expenditures,
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liberalized some of the restrictions on the percentage depletion allowance,
and reduced the impact of the alternative minimum tax on oil and gas
investments; 3) for alternative fuels, the law expanded the §29 tax credit for
unconventional fuels and introduced the tax credit for small producers of
ethanol used as a motor fuel.
! Energy Policy Act of 1992 (P.L. 102-486). This broad energy measure
included additional energy tax incentives, including: 1) liberalization of the
alcohol fuels tax exemption, 2) expansion of the §29 production tax credit
for non-conventional energy resources; 3) two new tax incentives for
biomass energy (an income tax deduction for the costs — up to $2,000 —
of alcohol fuel powered vehicles and a 1.5¢ per kilowatt hour income tax
credit for electricity produced from "closed-loop" biomass systems); and 4)
tax relief for the oil and gas industry.
! Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66). President
Clinton proposed a differential Btu tax on fossil fuels (a broadly-based
general tax primarily on oil, gas and coal based on the British Thermal Units
of heat output), which was dropped in favor of a broadly-applied 4.3¢/gal.
increase in the excise taxes on motor fuels with revenues allocated for deficit
reduction rather than the various trust funds.
! Taxpayer Relief Act of 1997 (P.L. 105-34). This tax cut legislation also
included a variety of excise tax provisions pertaining to motor fuels excise
taxes, some of which involved tax reductions on alternative transportation
fuels, and some of which involved increases such as on kerosene, which on
balance further tilted energy tax policy toward alternative fuels.
! Tax Relief and Extension Act ( H.R. 2923). Enacted as part of P.L. 106-
170, the Ticket to Work and Work Incentives Improvement Act of 1999,
title V of the law, the Tax Relief and Extension Act of 1999, extended and
liberalized the renewable electricity production tax credit, and renewed the
suspension of the net income limitation for the percentage depletion
allowance for marginal oil and gas wells.
As this list suggests, after Reagan, energy tax policy returned more to the course
established during the 1970s and primarily was directed at energy conservation and alternative
fuels. However, there is an environmental twist to this newer version of energy tax policy,
particularly in the more recent years, as the discussion of the President’s proposals will
demonstrate. Fiscal concerns, which for most of that period created a perennial search for
more revenues to reduce budget deficits, has also driven energy tax policy proposals during
the post-Reagan era. This is underscored by proposals to impose broad-based energy taxes
such as the Btu (British Thermal Units) tax; however, they have not been enacted.
There is another major difference between energy tax policy in the 1970s and energy
tax policy since 1988. Since 1988, while the primary focus continues to be energy
conservation and alternative fuels, no energy tax legislation has been enacted during this
period that does not also include some, relatively minor, tax relief for the oil and gas industry,
either in the form of new tax incentives or liberalization of an existing tax breaks (or both).
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As an indication of the current posture of federal energy tax policy, Table 1 at the end
of this issue brief summarizes current energy tax provisions and the corresponding revenue
effects (- indicates revenue losses, which means that the provision is a tax subsidy, or a tax
preference, rather than a tax).
Current Legislative Proposals
In 1999, the broad Republican tax cut in H.R. 2488 (the Taxpayer Refund and Relief Act
of 1999) – a $792 billion, ten-year tax cut proposal – packaged tax cuts for the oil and gas
industry with several alternative fuels tax incentives. The tax breaks for the oil and gas
industry, for example, included both new tax breaks and liberalizations of the tax treatment
of expensing, percentage depletion, and enhanced oil recovery. This bill was approved by the
Congress on August 5, 1999, but was vetoed by President Clinton on September 23, 1999.
The Republican leadership recently has stated that it will revisit a number of the provisions
in H.R. 2488, including the energy tax provisions, this year.
More recently, energy tax proposals have been incorporated in the President’s proposed
FY2001 budget and are being promoted by the Administration as being part of the President’s
Climate Change Technology Initiative (see CRS Report RL30452, Climate Change
Technology Initiative (CCTI): Research, Technology, and Related Programs.
) Also,
legislative interest recently has focused on a possible moratorium on the payment of part of
the federal excise taxes on gasoline and diesel fuel, which are taxed at 18.4¢ and 24.4¢/gallon
respectively, as a way of helping consumers and truckers cushion the financial effect of the
recent spike in fuel prices; higher prices raise transportation costs for all motorists, but reduce
income (profits) for truckers.
Many of the energy tax provisions in H.R. 2488 are included in S. 2557, the Republican
leadership’s broadly based energy bill. S. 2557 would enhance energy security and address
the current problems of high crude oil and petroleum product prices, and the potential crude
oil and petroleum product shortages. It also includes tax provisions that were not in H.R.
2488. It was introduced in May 2000 and is scheduled for Senate floor consideration the
week of September 25.
Energy Tax Proposals in The President’s FY2001 Budget
The President’s FY2001 budget, submitted in February of 2000, includes several energy
tax proposals, all favoring energy efficiency and renewable fuels technologies. These energy
tax preferences, which were first proposed as part of the FY1999 budget and modified for the
FY2000 budget, are targeted toward energy efficiency and alternatives fuels – there are no
tax incentives for oil and gas; and in fact the budget proposes to reinstate several expired
environmental excise taxes on oil, including the Superfund energy taxes. This issue brief
provides only a summary of the provisions. For more detail, including a comparison with
current tax law, see CRS Report 98-193 E, Global Climate Change: The Energy Tax
Incentives in the President’s FY2001 Budget
.
Energy Efficiency in Residential and Commercial Buildings. Three tax credits are
proposed in the FY2001 budget to reduce the amount of conventional energy — electricity
from fossil fuels, natural gas, heating oil, etc. — in residential and commercial buildings from
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levels that would be used without these subsidies: (1) a tax credit for solar energy equipment;
(2) a tax credit for the purchase of energy-efficient new homes; and (3) a tax credit for
purchases of energy efficiency building equipment and materials.
Tax Credits for Solar Energy Equipment. The Administration proposes a system of
solar energy tax credits very similar to those enacted in 1978 as part of President Carter’s
National Energy Plan – those that expired in 1985. Under the Administration’s proposal, a
tax credit for two types of solar-energy-using equipment would be provided: (1) a 15% tax
credit for up to $13,334 in investments in rooftop solar equipment that uses photovoltaic cells
to generate electricity, for a maximum tax credit of $2,000; and (2) a 15% tax credit for up
to $6,667 in investments in solar water heating equipment (other than swimming pools), for
a maximum tax credit of $1,000. Solar equipment installed in either a personal residence or
a business would qualify for this tax credit, which would be nonrefundable, i.e., limited by
the amount of tax otherwise owed. Both credits would be available beginning on January 1,
2001, but the credit for photovoltaic systems would last for 7 years, terminating on January
1, 2008, while the credit for water heating systems would last for 5 years, terminating on
January 1, 2006. Photovoltaic systems use solar cells made of semiconductor material that
convert sunlight directly into electricity. A photovoltaic solar system combines individual
cells into an interconnected panel used as part of a sunlight-absorbing roof or as a separate
self-contained electricity generating system.
Tax Credit for New Energy Efficient Homes. Some federal laws and certain states
require energy-using home appliances, heating and cooling equipment, and insulation to meet
certain energy efficiency standards. But there are otherwise no special tax incentives to
encourage the supply of energy efficient homes. The President’s FY2001 budget proposes
a tax credit for the cost of a new home that would meet certain energy efficiency standards.
The tax credit would be $1,000 for new homes that are at least 30% more efficient than the
IECC (International Energy Conservation Code) standard purchased between January 1,
2001 and December 31, 2003. The tax credit would be $2,000 for new homes that are at
least 50% more efficient than the IECC standard and are purchased between January 1, 2001
and December 31, 2005.
Tax Credit for Energy-Efficient Building Equipment. The last of the three tax credits
to reduce fossil fuel use in residential and commercial buildings is a tax credit for the cost of
several specified types of advanced energy-efficient equipment and technologies for space
heating and cooling and hot water heaters. In the FY2000 budget this was a bi-level tax
credit of either 10% or 20% dependent upon the efficiency rating of the eligible equipment.
In the current budget this is a 20% tax credit toward the cost of the following three types of
energy-efficient equipment:
! Fuel cells with a minimum generating capacity of 5Kw, and a generation
efficiency of at least 35%. (The maximum credit would be $500 per kilowatt
of capacity.)
! Energy efficient electric heat pump water heaters. A maximum tax credit
of $500 per unit for heaters with an energy factor rating of at least 1.7 in the
Department of Energy test procedure;
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! More energy efficient natural gas heat pumps. Those with an energy factor
of at least 1.25 for heating and at least 0.70 for cooling would qualify for a
maximum tax credit of $1,000 per unit;
Energy Efficiency in Commercial and Industrial Energy Use. The President’s
FY2001 budget proposes to accelerate depreciation deductions for small electrical generating
systems (self-generated power) and for co-generation systems, which the budget calls
distributed power technologies. Such equipment would all be depreciated over a 15 year
recovery period, thus reducing the recovery period for many types of equipment used in
commercial and rental buildings, which were depreciated over much longer time periods. This
reclassification to shorter recovery periods also allows distributed power systems and
combined heat and power systems to qualify for a more accelerated method of depreciation
(150% declining balance rather than straight line depreciation) which basically means that
more of the equipment costs can be written off in the early years, thus increasing the present
value of the depreciation deduction, and reducing effective tax rates.
Distributed power equipment would include combined heat and power equipment,
which are energy systems that capture the thermal energy (for either heating or cooling) or
the mechanical power — whatever the case may be — that would otherwise be wasted when
industrial manufacturing processes generate electricity. Thus, they are essentially a type of
co-generation equipment: with one source of energy, a company can simultaneously power
its turbines to generate electricity to either heat or cool its building or provide mechanical
power used in some manufacturing process. Fuel inputs are conserved by making an energy-
using process — the generation of electrical power — more efficient: the otherwise wasted
energy would be harnessed and would be used in the same process.
Energy Efficiency in the Transportation Sector. Greater energy tax subsidies are also
targeted for more energy efficient automobiles and trucks – the single largest users of
petroleum – and for purchases of electric powered vehicles.
Tax Credit for Fuel Efficient Hybrid Vehicles. A new tax credit would be available
for the purchase of cars and light trucks (including minivans, sport utility vehicles, and
pickups) that run alternately on a consumable fuel, such as gasoline, and a rechargeable
energy storage system (such as an electric battery). These “hybrid” fuel vehicles, which are
more economical — fuel efficient — than comparable vehicles in their class, would qualify
for an income tax credit from $750 to $3,000 per vehicle, depending on two factors: 1) the
proportion of the vehicle’s power generated by the energy storage system (the higher the
proportion, the greater the tax credit); and 2) whether the vehicle has a regenerative braking
system (in which case the credit is greater depending upon how much energy is supplied by
such a system). A qualifying hybrid vehicle would be a vehicle powered by onboard fuel,
which uses regenerative braking and an energy storage system that will recover at least 60%
of the energy in a typical 70-0 braking event. Such a qualifying vehicle would have to satisfy
all emission requirements applicable to gasoline-powered automobiles. This credit would be
available for vehicles purchased between January 1, 2003, and December 31, 2006.
Tax Credit for Electric Vehicles. The second transportation tax provision is a
liberalization of the current tax credit for electric vehicles. Under current law, consumers
who purchase an electric vehicle can claim a 10% nonrefundable tax credit for the cost of the
vehicle placed in service prior to 2005. The maximum credit is $4,000 but only for purchases
made through 2001. For vehicles purchased between 2002 and 2004, the credit is reduced
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by 25% each year, which means the credit ends in 2004. The President’s FY2001 budget
proposes to repeal the phase-out of the credit; it would be extended through 2006. Thus,
the maximum $4,000 tax credit would be available through 2006. (Current tax law also has
more liberal depreciation treatment of electric vehicles used in businesses. (See CRS Report
98-193 E for more detail.)
Liberalization of the Renewable Electricity Production Tax Credit. Finally, the
President’s FY2001 budget also proposes a liberalization of the current 1.5¢/kWh tax credit
for electricity produced from wind systems, closed-loop biomass systems, and other biomass.
The current credit remains available when electricity reference prices (which are separate for
wind and biomass) are below statutorily determined threshold base prices. For 1999 (the
latest year available) reference prices were 4.836¢ for electricity produced from wind and 0¢
for electricity produced from biomass. The threshold price of electricity was about 9¢/kWh.
Since both reference prices were less than the threshold prices for the credit phase-out, the
renewable electricity credit was not phased-out and remained at 1.7¢/ kWh (1.5¢ times the
inflation adjustment factor). However, it is not known whether in fact any electricity produced
from wind and biomass actually qualifies for the tax credit. In calender year 1996, there were
no sales of electricity produced from closed-loop biomass energy resources under contracts
signed after December 31, 1989.
The President’s proposal would make several important amendments to the renewable
electricity tax credit:
! The placed- in-service deadline for wind and closed-loop biomass would be
extended by 2 ½ years from January 1, 2002 (present law) to July 1, 2004
(the credit would continue to be available for up to 10 years after that);
! The definition of eligible biomass sources would be substantially expanded
to include solid, nonhazardous, cellulosic waste material that is segregated
from other waste materials, and that is derived from one of several qualifying
types of forest-related resources. The credit for electricity produced from
these would be reduced to 1.0¢/kWh;
! Powerplants that can co-fire biomass and coal to generate electricity would
qualify for the tax credit but at a reduced rate of 0.5¢ per kWh hour adjusted
for post-2000 inflation; and
! Output of electricity generated from facilities that use methane from landfills
(bio-gas) would be eligible for a tax credit of either 1.5¢ or 1.0¢/kWh
depending on whether the facilities meet the Environmental Protection
Agencies New Source Performance Standards.
Moratorium on Motor Fuel Excise Taxes
Policymakers are currently focused on possible policy options to address the recent spike
in petroleum prices, including a moratorium on the payment of gasoline and diesel fuel excise
taxes. Virtually all transportation fuels are taxed under a complicated structure of tax rates
and exemptions that vary by mode and type of fuel. Gasoline used in highway transportation
— the fuel used more than any other — is taxed at a rate of 18.4¢ per gallon, composed of:
an 18.3¢ Highway Trust Fund rate, which goes into the federal highway trust fund (HTF); and
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a 0.1¢ rate that is earmarked for the Leaking Underground Storage Tank Trust Fund (LUST),
which finances the cost of cleaning up spills from underground fuel storage tanks. The HTF
component of the gasoline tax, the single largest source of revenue for the HTF, is projected
to yield $22.3 billion for FY2001 (i.e., motorists will pay an additional $22.3 billion in fuel
costs for the HTF). Most of that revenue (15.44¢/gal. of the 18.3¢ per gallon tax) goes into
the “highway account” to be used for highway construction and maintenance; revenues from
the remaining 2.86¢ are allocated to the “mass transit account,” to be used for capital
expenditures on mass transit systems.
Diesel fuel for highway use — the second most commonly used highway fuel, used
mostly by trucks — and kerosene to the extent that it also used as a highway fuel, are taxed
at 24.4¢ per gallon, 6¢/gallon more than gasoline. The tax on kerosene used on the highways
was added as part of the Taxpayer Relief Act of 1997 in order to reduce tax evasion.
Kerosene and diesel (also called distillates) used as heating oil get a full refund or tax credit.
The highway tax on diesel (and kerosene) fuel also comprises two components: a 24.3¢ rate
that is allocated into the HTF, and 0.1¢ that goes into the LUST fund. Unlike gasoline,
however, which is largely consumed for personal use, diesel fuel is used primarily in trucks
that transport goods, i.e, it is primarily used by businesses. Gross revenues from the diesel
tax are estimated to be about $7.5 billion in FY2001. However, as this tax is a cost of doing
business for truckers, it is deductible against income taxes so that the net revenue yield to the
federal government — i.e., the net cost to truckers — is smaller by about 25%, according
to the Joint Committee on Taxation, the official scorer on such matters. Thus, net revenues
in FY2001, including offsets, are estimated at about $5.6 billion. Revenues from 2.86¢ of the
tax are also allocated for mass transit; revenues from the remaining 24.3¢ HTF component
(21.44¢) go into the highway account. Truckers also pay three other federal excise taxes,
whose revenues also go to the HTF. Besides gasoline and diesel, other transportation fuels
are also taxed at varying rates: railroad diesel and aviation fuel are taxed at 4.4¢/gal.; diesel
fuel used by barges and other vessels on the inland waterways pay a tax of 24.4¢/gal.

Brief History of Motor Fuels Taxes. The federal excise tax on gasoline was first
enacted in 1932, at the rate of 1¢/gal. in order to reduce budget deficits, which were
mounting due to the great depression. Diesel fuel was added in 1951 at the rate of 2¢/ gal.
All the revenues went into the general fund. The taxes were raised gradually to 4¢ by 1959,
with revenues going into the newly created Highway Trust Fund, which was created in 1956.
Proposals to increase the federal excise tax on gasoline became common during and after
the 1973-1974 Arab oil embargo and subsequent rises in crude oil prices. Coming in the
aftermath of the 1973-74 oil shock, such proposals were intended largely to reduce
consumption of motor fuels (by raising their prices), and thereby to reduce oil imports.
Perhaps best known of these proposals was Senator Jackson's -- to raise the tax by $1.00 per
gallon. Other major proposals of the period were Senator Johnston's and Representative
Anderson's 50¢ increase proposals (S. 1749 and H.R. 6071, 96th Congress). Senator
Bentsen's 1975 bill (S. 973, 94th Congress) proposed a phased-in increase of up to 20¢ per
gallon to be credited against the income tax.
Emphasis on the revenue-raising potential of the gasoline tax began in the early 1980s,
as it became clear that the federal budget was headed for large deficits over the next several
years. From 1983 to 1993, there were five tax increases, raising them to their present levels.
In late 1982, in addition to concern about fiscal deficits and energy security, attention began
to focus on the allegedly large portion of roads and highways that had fallen into disrepair.
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Title I of the Surface Transportation Assistance Act of 1982 (P.L. 97-424) raised the taxes
by 5¢/gallon (to 9¢, effective April 1, 1983). The Tax Reform Act of 1984 (P.L. 98-369)
raised the diesel fuel tax another 6¢ /gallon (to 15¢) and thus introduced the differential
between gasoline and diesel tax rates. This was part of a congressional compromise that
raised the diesel tax in return for repeal of a scheduled boost in highway use taxes truckers
pay based on vehicle weights. An 0.1¢ per-gallon tax was added by the Superfund
Amendments and Reauthorization Act of 1986 (P.L. 99-499) to fund the clean-up of spills
from leaking underground storage tanks (LUST). This tax terminated on December 31, 1995,
but was reinstated by the Taxpayer Relief Act of 1997.
During the early 1990s, deficit reduction continued to be a key underlying objective of
many of the proposals to hike motor fuel excise taxes. The Omnibus Budget and
Reconciliation Act of 1990 raised the gasoline and diesel fuel taxes by another 5¢ per gallon,
designating 2.5¢ for deficit reduction. Some also saw it as a means of raising highway vehicle
fuel efficiency (rather than by strengthening fuel economy standards). The Omnibus Budget
Reconciliation Act of 1993 increased the portion of motor fuels taxes by 4.3¢, with all of the
increase designated for the general fund (raising the total general fund component to 6.8¢ per
gallon). This tax was the congressional substitute for the Clinton Administration’s ill-fated
Btu (British Thermal Unit) tax. On October 1, 1995, the 2.5¢ portion of the 6.8¢ general
fund component was reallocated to the HTF; on October 1, 1997 the remaining 4.3¢ part of
the general fund component was also designated for the HTF, the result of the Taxpayer
Relief Act of 1997. Thus, as a result of the 1997 legislative amendments there is no longer
a 4.3¢ motor fuels tax component in the Internal Revenue Code.
Legislative Proposals. Several energy tax proposals have recently been made in
response to the high petroleum product prices, particularly higher than average prices in the
in the Midwest. Some congressional legislation proposes to reduce the federal excise taxes
on the various transportation fuels; other legislation proposes to impose a windfall profit tax
on refiners and other suppliers on the assumption that they might be gouging consumers and
earning “excess profits.” In the spring of this year, following a similar spike in heating oil and
diesel fuel in the Northeast during the winter of 1999/2000, Senators Lott and Murkowski
proposed (in S. 2285) to temporarily repeal the motor fuels excise taxes – a so-called “fuels
tax holiday.”(For a more detailed discussion of S. 2285, see CRS Report RL30497,
Suspending the Gas Tax: Analysis of S. 2285.). More recently, as a result of the spike in
gasoline prices in the Midwest, there is a recrudescence of interest in these excise tax relief
proposals as well as interest in proposals to impose a windfall profit tax. A windfall profit tax
on crude oil, rather than petroleum products, was imposed from 1980 until its repeal in 1988.
(For more detail on this tax see CRS Report 90-442 E), The Windfall Profit Tax on Crude
Oil: Overview of the Issues.)

LEGISLATION
H.R. 3749 (Ramstad)
Amends the Internal Revenue Code of 1986 to temporarily repeal 10¢ of the highway
trust fund taxes on gasoline, diesel, and kerosene. Specifies that the highway trust fund
revenues are to be maintained from general revenues in the amount of the estimated revenue
loss from repeal. Introduced February 29, 2000; referred to Committee on Ways and Means.
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H.R. 3881 (Graham)
Amends the Internal Revenue code of 1986 to permanently repeal the 4.3¢ increase on
most motor fuels enacted in 1993, including aviation fuel. Introduced March 9, 2000; referred
to Committee on Ways and Means.
H.R. 4006 (Collins)
Amends the Internal Revenue Code of 1986 to temporarily repeal the 5¢ per gallon
motor fuels tax increase enacted in 1990 and the 4.3¢ per gallon tax increases enacted in
1993. Permanently repeals the fuels taxes after September 30, 2007. Introduced on March
29, 2000; referred to the Committee on Ways and Means.
H.R. 5542 (Armey)
Taxpayer Relief Act of 2000. Includes provisions to increase tax benefits for pensions
and IRAs and health insurance; several provisions for small business; reform of the foreign
sales corporation rules; and repeal of the general fund excise tax on rail diesel and inland
waterways fuel.
S. 1833 (Daschle)
Energy Security Tax Act of 1999. This is a very broad based bill to expand current law
incentives and provides many additional and sizeable tax incentives to encourage the use of
more efficient energy consumption technologies (such as clean-coal technologies) and the use
of alternative fuels. Also includes additional new tax incentives for oil and gas production.
Introduced on October 29, 1999; referred to Committee on Finance.
S. 2285 (Lott)
Amends the Internal Revenue Code of 1986 to temporarily repeal the excise taxes on
gasoline, diesel (including Kerosene), and aviation fuel by either 4.3¢/gal., or by all but the
0.1¢/gal. LUST fund tax. Maintains HTF revenues by allocating the equivalent of foregone
excise tax revenues from the general fund. Introduced March 22, 2000; read the second time
and placed on calendar.
S. 2557 (Lott)
The National Energy Security Act of 2000. Amends the Internal Revenue Code of 1986
to provide a number of tax incentives for domestic oil and gas production as well as for the
use of renewable energy resources such as biomass, and solar energy, and for increased
energy efficiency, and energy conservation. Introduced May 16; placed directly on the Senate
calendar. A motion to proceed for floor consideration was approved on September 22, 2000.
S. 3152 (Roth)
The Community Renewal and New Markets Act of 2000. Provides various tax
incentives for distressed communities, affordable housing, urban and rural infrastructure, tax
relief for farmers, the production of energy, conservation, and energy efficiency, and several
additional tax provisions. Introduced on October 3, 2000; referred to Committee on Finance
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Table 1. Energy Tax Provisions and Revenue Effects (in $ mil.) in Current Tax Code
Category
Provision
Major Limitations
Revenue Effect
FOSSIL FUELS SUPPLY (bpd = barrels per day; < indicates less than)
% depletion--oil/gas
15% of sales (higher
for indep.,up to 1,000 or
- $500
for marginal wells)
equiv. bpd
% depletion--coal and
10% for coal
must be < 50% of taxable
- 300
other fuels
income
Expensing of IDC’s--
100% deductible in
corporations expense only
- 400
oil/gas & other fuels
first year
70% of IDC’s
Enhanced Oil Recovery
15% of the costs
only for specific tertiary
<-50
Credit
methods
ALTERNATIVE FUELS SUPPLY
§29, production tax
$6.25/gal (or
biogas, coal synfuels,
-1,300
credit
$1.00/mcf)
coalbed methane, etc.
5.4¢ exemption for
exemption from motor
for biomass ethanol only
- 700
gasohol
fuels taxes
tax credits for alcohol
54¢/gal+ 10¢/gal for
only for biomass ethanol
<-50
fuels
small producers
(e.g., corn)
exclusion of interest on
interest income exempt
for hydroelectric or
-100
S&L bonds
from tax
biomass facilities
deduction for clean-fuel
$2,000 for cars;
$100,000 deduction for
< -50
vehicles
$50,000 for trucks
refueling facilities
tax credit for electric
10%, up to $4,000
phase-out from 2002-2004
< 50
vehicles
credit for solar &
10% investment tax
utilities excluded
<-50
geothermal tech.
credit
credit for renewable
1.5¢/kWh.
only for wind and closed
-100
electricity
loop biomass
ENERGY CONSERVATION
motor fuels taxes
18.4¢/gal of gas
4.4¢-24.4¢ for other fuels
31,000
coal excise tax
$1.10/ton (0.55 for
not to exceed 4.4% of sales
760
surface mines)
price
gas-guzzler tax
$1,000-$7,700/car
to limos and vehicles
<50
weighing 6,000 lbs. or less
mass trans. subsidies
exclusion of $60/month
up to $155/month for
-3,600
parking benefits
exclusion for utility
subsidies not taxable as
any energy conservation
<-50
conservation subsidies
income
measure
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