End Big Oil Tax Subsidies Act of 2013

To amend the Internal Revenue Code of 1986 to repeal fossil fuel subsidies for large oil companies. 1. Short title This Act may be cited as the End Big Oil Tax Subsidies Act of 2013 2. Amortization of geological and geophysical expenditures (a) In general Subparagraph (A) of section 167(h)(5) major integrated oil company covered large oil company (b) Covered large oil company Paragraph (5) of section 167(h) of such Act is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraph: (B) Covered large oil company For purposes of this paragraph, the term covered large oil company (i) is a major integrated oil company, or (ii) has gross receipts in excess of $50,000,000 for the taxable year. For purposes of clause (ii), all persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person. . (c) Conforming amendment The heading for paragraph (5) of section 167(h) of such Code is amended by inserting and other large taxpayers (d) Effective date The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2013. 3. Producing oil and gas from marginal wells (a) In general Section 45I of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (e) Exception for taxpayer who is not small, independent oil and gas company (1) In general Subsection (a) shall not apply to any taxpayer which is not a small, independent oil and gas company for the taxable year. (2) Aggregation rule For purposes of paragraph (1), all persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person. . (b) Effective date The amendment made by subsection (a) shall apply to credits determined for taxable years beginning after December 31, 2013. 4. Enhanced oil recovery credit (a) In general Section 43 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (f) Exception for taxpayer who is not small, independent oil and gas company (1) In general Subsection (a) shall not apply to any taxpayer which is not a small, independent oil and gas company for the taxable year. (2) Aggregation rule For purposes of paragraph (1), all persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person. . (b) Effective date The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2013. 5. Intangible drilling and development costs in the case of oil and gas wells (a) In general Subsection (c) of section 263 This subsection shall not apply to amounts paid or incurred by a taxpayer in any taxable year in which such taxpayer is not a small, independent oil and gas company, determined by deeming all persons treated as a single employer under subsections (a) and (b) of section 52 as 1 person. (b) Effective date The amendment made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2013. 6. Percentage depletion (a) In general Section 613A of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (f) Exception for taxpayer who is not small, independent oil and gas company (1) In general This section and section 611 shall not apply to any taxpayer which is not a small, independent oil and gas company for the taxable year. (2) Aggregation rule For purposes of paragraph (1), all persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person. . (b) Conforming amendment Section 613A(c)(1) of such Code is amended by striking subsection (d) subsections (d) and (f) (c) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2013. 7. Tertiary injectants (a) In general Section 193 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (d) Exception for taxpayer who is not small, independent oil and gas company (1) In general Subsection (a) shall not apply to any taxpayer which is not a small, independent oil and gas company for the taxable year. (2) Exception for qualified carbon dioxide disposed in secure geological storage Paragraph (1) shall not apply in the case of any qualified tertiary injectant expense paid or incurred for any tertiary injectant that is qualified carbon dioxide (as defined in section 45Q(b)) which is disposed of by the taxpayer in secure geological storage (as defined by section 45Q(d)). (3) Aggregation rule For purposes of paragraph (1), all persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person. . (b) Effective date The amendment made by this section shall apply to expenses incurred after December 31, 2013. 8. Passive activity losses and credits limited (a) In general Paragraph (3) of section 469(c) (C) Exception for taxpayer who is not small, independent oil and gas company (i) In general Subparagraph (A) shall not apply to any taxpayer which is not a small, independent oil and gas company for the taxable year. (ii) Aggregation rule For purposes of clause (i), all persons treated as a single employer under subsections (a) and (b) of section 52 shall be treated as 1 person. . 9. Income attributable to domestic production activities (a) In general Section 199 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (e) Exception for taxpayer who is not small, independent oil and gas company Subsection (a) shall not apply to the income derived from the production, transportation, or distribution of oil, natural gas, or any primary product (within the meaning of subsection (d)(9)) thereof by any taxpayer which for the taxable year is an oil and gas company which is not a small, independent oil and gas company. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2013. 10. Prohibition on using last-in, first-out accounting for major integrated oil companies (a) In general Section 472 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (h) Major integrated oil companies Notwithstanding any other provision of this section, a major integrated oil company (as defined in section 167(h)) may not use the method provided in subsection (b) in inventorying of any goods. . (b) Effective date and special rule (1) In general The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2013. (2) Change in method of accounting In the case of any taxpayer required by the amendment made by this section to change its method of accounting for its first taxable year beginning after the date of the enactment of this Act— (A) such change shall be treated as initiated by the taxpayer, (B) such change shall be treated as made with the consent of the Secretary of the Treasury, and (C) the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account ratably over a period (not greater than 8 taxable years) beginning with such first taxable year. 11. Modifications of foreign tax credit rules applicable to dual capacity taxpayers (a) In general Section 901 (n) Special rules relating to dual capacity taxpayers (1) General rule Notwithstanding any other provision of this chapter, any amount paid or accrued by a dual capacity taxpayer to a foreign country or possession of the United States for any period with respect to combined foreign oil and gas income (as defined in section 907(b)(1)) shall not be considered a tax to the extent such amount exceeds the amount (determined in accordance with regulations) which would have been required to be paid if the taxpayer were not a dual capacity taxpayer. (2) Dual capacity taxpayer For purposes of this subsection, the term dual capacity taxpayer (A) is subject to a levy of such country or possession, and (B) receives (or will receive) directly or indirectly a specific economic benefit (as determined in accordance with regulations) from such country or possession. . (b) Effective date (1) In general The amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after December 31, 2013. (2) Contrary treaty obligations upheld The amendments made by this section shall not apply to the extent contrary to any treaty obligation of the United States.

Summary: End Big Oil Tax Subsidies Act of 2013 - Amends the Internal Revenue Code to require seven-year amortization of the geological and geophysical expenditures of covered large oil companies. Defines "covered large oil company" as a taxpayer which is a major integrated oil company or which has gross receipts in excess of $50 million in a taxable year. Denies certain tax benefits to any taxpayer that is not a small, independent oil and gas company, including: (1) the tax credits for producing oil and gas from marginal wells and for enhanced oil recovery, (2) expensing of intangible drilling and development costs in the case of gas wells and geothermal wells, (3) percentage depletion, (4) the tax deduction for qualified tertiary injectant expenses, (5) the exemption from limitations on passive activity losses, and (6) the tax deduction for income attributable to domestic production activities. Prohibits the use of the last-in, first-out (LIFO) accounting method by major integrated oil companies. Limits or denies the foreign tax credit and tax deferrals for amounts paid or accrued by a dual capacity taxpayer to a foreign country or U.S. possession for any period with respect to combined foreign oil and gas income. Defines "dual capacity taxpayer" as a person who is subject to a levy of a foreign country or U.S. possession and receives (or will receive) directly or indirectly a specific economic benefit from such county or possession..