Yesterday, Congress passed the Tax Cuts and Jobs Act (TCJA)* – the most sweeping tax overhaul since 1986. TCJA cuts the corporate tax rate to 21% from 35%, while maintaining key oil and natural gas deductions (intangible drilling costs, percentage depletion and amortization of geological and geophysical costs).
Other key priorities for the industry include:
- Adoption of a modified international territorial system
- Reduction of tax rates for pass-through income
- Elimination of the corporate alternative minimum tax
- Authorization of lease sales in sections of the Arctic National Wildlife Refuge
- Additional priorities are captured in the attached summary.
The final bill – a product of seven weeks of lightning-fast legislating – was approved by Congress earlier this week along party lines. The law is a major victory for the Republican Party, as well as the oil and natural gas industry.
The Tax Foundation has issued an overview and analysis of the TCJA. If you have questions, please contact PESA Senior Director Public Policy Jean Gould.
* On Dec 19, the official name for the legislation was changed to: “To provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018.”