To amend the Internal Revenue Code of 1986 to impose a windfall profit tax on oil and natural gas (and products thereof) and to use the proceeds of the windfall profit tax collected to carry out the Low-Income Home Energy Assistance Act and for medical services provided by the Department of Veterans Affairs.

Summary: Consumer Windfall Excess Oil Profits Protection Act of 2005 - Amends the Internal Revenue Code to impose an excise tax of 50 percent on the windfall profit from sales of any crude oil, natural gas, or related products and the net gains from transactions related to the price of crude oil, natural gas, or related products. Defines "windfall profit" as the excess of taxpayer adjusted taxable income over the reasonably inflated average profit for the taxable year (average of taxpayer adjusted taxable income for 2000-2004, plus 10 percent of such average).

Allows a tax deduction for the payment of any such windfall profit tax.

Appropriates equal amounts of the windfall profit tax generated by this Act to carry out the Low-Income Home Energy Assistance Act of 1981 and to increase funding for Department of Veterans Affairs medical services.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer Windfall Excess Oil Profits 
Protection Act of 2005''.

SEC. 2. WINDFALL PROFITS TAX ON CRUDE OIL, NATURAL GAS, AND PRODUCTS 
              THEREOF.

    (a) In General.--Subtitle E of the Internal Revenue Code of 1986 
(relating to alcohol, tobacco, and certain other excise taxes) is 
amended by adding at the end thereof the following new chapter:

``CHAPTER 56--WINDFALL PROFITS ON CRUDE OIL, NATURAL GAS, AND PRODUCTS 
                                THEREOF

``Sec. 5896. Imposition of tax.
``Sec. 5897. Windfall profit; etc.
``Sec. 5898. Special rules and definitions.

``SEC. 5896. IMPOSITION OF TAX.

    ``In addition to any other tax imposed under this title, there is 
hereby imposed on every taxpayer an excise tax in an amount equal to 50 
percent of the windfall profit for any taxable year from--
            ``(1) sales of any crude oil, natural gas, or other taxable 
        product thereof, and
            ``(2) net gains from transactions of an interest the price 
        of which is determined in whole or in part by reference to the 
        price of crude oil, natural gas, or other taxable product 
        thereof.

``SEC. 5897. WINDFALL PROFIT; ETC.

    ``(a) General Rule.--For purposes of this chapter, the term 
`windfall profit' means the excess of--
            ``(1) the adjusted taxable income of the taxpayer for the 
        taxable year, over
            ``(2) the reasonably inflated average profit for such 
        taxable year.
    ``(b) Adjusted Taxable Income.--For purposes of this chapter, with 
respect to any taxpayer, the adjusted taxable income for any taxable 
year is equal to the taxable income for such taxable year (within the 
meaning of section 63 and determined without regard to this 
subsection)--
            ``(1) increased by any interest expense deduction, 
        charitable contribution deduction, and any net operating loss 
        deduction carried forward from any prior taxable year, and
            ``(2) reduced by any interest income, dividend income, and 
        net operating losses to the extent such losses exceed taxable 
        income for the taxable year.
 In the case of any taxpayer which is a foreign corporation, the 
adjusted taxable income shall be determined with respect to such income 
which is effectively connected with the conduct of a trade or business 
in the United States.
    ``(c) Reasonably Inflated Average Profit.--For purposes of this 
chapter, with respect to any applicable taxpayer, the reasonably 
inflated average profit for any taxable year is an amount equal to the 
average of the adjusted taxable income of such taxpayer for taxable 
years beginning during the 2000-2004 taxable year period (determined 
without regard to the taxable year with the highest adjusted taxable 
income in such period) plus 10 percent of such average.
    ``(d) Taxable Product Thereof.--The term `taxable product thereof' 
means any fuel which is a product of crude oil or natural gas.

``SEC. 5898. SPECIAL RULES AND DEFINITIONS.

    ``(a) Withholding and Deposit of Tax.--The Secretary shall provide 
such rules as are necessary for the withholding and deposit of the tax 
imposed under section 5896.
    ``(b) Records and Information.--Each taxpayer liable for tax under 
section 5896 shall keep such records, make such returns, and furnish 
such information as the Secretary may by regulations prescribe.
    ``(c) Return of Windfall Profit Tax.--The Secretary shall provide 
for the filing and the time of such filing of the return of the tax 
imposed under section 5896.
    ``(d) Businesses Under Common Control.--For purposes of this 
chapter, all members of the same controlled group of corporations 
(within the meaning of section 267(f)) and all persons under common 
control (within the meaning of section 52(b) but determined by treating 
an interest of more than 50 percent as a controlling interest) shall be 
treated as 1 person.
    ``(e) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
chapter.''.
    (b) Clerical Amendment.--The table of chapters for subtitle E of 
such Code is amended by adding at the end the following new item:

``Chapter 56. Windfall profits on crude oil, natural gas, and products 
                               thereof''.

    (c) Deductibility of Windfall Profit Tax.--The first sentence of 
section 164(a) of such Code (relating to deduction for taxes) is 
amended by inserting after paragraph (5) the following new paragraph:
            ``(6) The windfall profit tax imposed by section 5896.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning in 2005 or 2006.

SEC. 3. USE OF PROCEEDS FROM WINDFALL PROFITS ON CRUDE OIL, NATURAL 
              GAS, AND PRODUCTS THEREOF.

    There are hereby appropriated amounts equivalent to the taxes 
received in the Treasury under chapter 56 of the Internal Revenue Code 
of 1986, as follows:
            (1) 50 percent of such amounts, which shall be available 
        only for carrying out the Low-Income Home Energy Assistance Act 
        of 1981, and
            (2) 50 percent of such amounts, which shall be credited to 
        the current appropriation of the Department of Veterans Affairs 
        that is available for medical services.