Senate Bill Gives Giant Tax Break to Big Oil

[Passages]

A provision inserted by Sen. James Lankford (R-OK) would exempt many domestic oil and gas drillers from having to pay any corporate taxes.

by David Dayen June 18, 2025


An obscure provision in the Senate Finance Committee’s draft of the One Big Beautiful Bill Act shields domestic onshore oil and gas drillers from the Inflation Reduction Act’s corporate alternative minimum tax, a benefit that will largely be taken by companies based in Oklahoma. That state’s senior senator, James Lankford (R-OK), secured the tax break even though it did not appear in the House version of the bill.

The corporate alternative minimum tax (CAMT), a signature achievement of Sen. Elizabeth Warren (D-MA), was designed to prevent companies from using elaborate accounting tricks to avoid paying taxes entirely. The CAMT requires corporations with adjusted earnings over $1 billion to pay a minimum rate of 15 percent of the “book profits” that they report to shareholders. There are a couple of exemptions on what counts as income, including adjustments for certain types of property and foreign taxes. But though the rules are complicated, it’s a fairly clean tax provision as these things go.

The Senate Finance Committee aims to change that. Section 70523, buried on page 343 of the 549-page draft text, makes a tweak to the CAMT by directing the Internal Revenue Service to take into account “intangible drilling and development costs.”

The language mirrors a bill, the Promoting Domestic Energy Production Act, that Sen. Lankford introduced earlier this year. The American Petroleum Institute (API) immediately praised the bill as “critical to supporting the production of our nation’s abundant oil and natural gas resources.”

https://prospect.org/politics/2025-06-18-senate-bill-gives-giant-tax-break-to-big-oil/

Influence of Big Money
Brennan Center for Justice
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Influence of Big Money. A handful of wealthy donors dominate electoral giving and spending in the United States. We need limits on campaign finance, ...