A working version of a comprehensive tax reform bill under consideration by a Senate panel appears more generous to the oil and gas industry than a version unveiled by lawmakers in the House.
Last Thursday, the Joint Committee on Taxation released a 253-page description of the chairman's mark version of the Tax Cuts and Jobs Act, which if enacted would be the first overhaul of the nation's tax code since 1986. The Senate Finance Committee is scheduled to hold a markup hearing on the bill on Monday (Nov. 13).
Like the version released Nov. 2 by the House Committee on Ways and Means, the Senate version of the tax reform bill would continue to allow oil and gas operators to deduct intangible drilling costs and the passive loss exception. But the Senate appears to be parting with the House over plans to repeal credits for enhanced oil recovery and production from marginal oil and gas wells.
The Senate version of the bill also proposes lowering the corporate tax rate to 20%, but the cut would not take effect until 2019. The House version calls for the cut to take effect in 2018.
"We have been laser-focused on reducing taxes for the middle class, and that is exactly what this bill will do," Senate Finance Committee Chairman Orrin Hatch (R-UT) said from the Senate floor. "Combined, these changes to our broken tax code in the chairman's mark will give hardworking taxpayers across the country bigger paychecks and more opportunities."
Hatch was joined by nine Senate colleagues, all Republicans, including Senate Majority Leader Mitch McConnell (R-KY). Lawmakers from four major energy-producing states -- Sens. John Cornyn (R-TX), Rob Portman (R-OH), Pat Toomey (R-PA) and Bill Cassidy (R-LA) -- were also at Hatch's side.