Big Oil Windfall Profits Tax Act
Bill: S.3802 | Sponsor: Sen. Whitehouse, Sheldon (D-RI)
Policy area: Taxation

Summary:
Big Oil Windfall Profits Tax Act
This bill imposes an excise tax on the windfall profits of crude oil on taxpayers who extracted and imported more than 300,000 barrels (a barrel equals 42 U.S. gallons) of taxable crude oil (i.e., crude oil, crude oil condensates, and natural gasoline) in 2019, or who extracted and imported that amount in the current calendar quarter.
The bill requires rebates of the tax collected to be paid to individual taxpayers. The bill establishes the Protect Consumers from Gas Hikes Fund to finance such rebates.

To amend the Internal Revenue Code of 1986 to impose a windfall profits 
    excise tax on crude oil and to rebate the tax collected back to 
             individual taxpayers, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Big Oil Windfall Profits Tax Act''.

SEC. 2. WINDFALL PROFITS TAX.

    (a) In General.--Subtitle E of the Internal Revenue Code of 1986 is 
amended by adding at the end thereof the following new chapter:

              ``CHAPTER 56--WINDFALL PROFITS ON CRUDE OIL

``Sec. 5896. Imposition of tax.
``Sec. 5897. Definitions and special rules.

``SEC. 5896. IMPOSITION OF TAX.

    ``(a) In General.--In addition to any other tax imposed under this 
title, in each calendar quarter there is hereby imposed on any covered 
taxpayer an excise tax at the rate determined under subsection (b) on--
            ``(1) each barrel of taxable crude oil extracted by the 
        taxpayer within the United States and removed from the property 
        of such taxpayer during the calendar quarter, and
            ``(2) each barrel of taxable crude oil entered into the 
        United States during the calendar quarter by the taxpayer for 
        consumption, use, or warehousing.
    ``(b) Rate of Tax.--
            ``(1) In general.--The rate of tax imposed by this section 
        on any barrel of taxable crude oil for any calendar quarter is 
        the product of--
                    ``(A) 50 percent, and
                    ``(B) the excess (if any) of--
                            ``(i) the average price of a barrel of 
                        Brent crude oil over the covered calendar 
                        quarter, over
                            ``(ii) the average price of a barrel of 
                        Brent crude oil over the period beginning on 
                        January 1, 2015, and ending on December 31, 
                        2019.
            ``(2) Inflation adjustment.--
                    ``(A) In general.--In the case of a calendar 
                quarter beginning in any taxable year beginning after 
                2022, the amount determined under paragraph (1)(B)(ii) 
                shall be increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `2021' for `2016' in 
                        subparagraph (A)(ii) thereof.
                    ``(B) Rounding.--If any dollar amount, after being 
                increased under subparagraph (A), is not a multiple of 
                $0.50, such dollar amount shall be rounded to the next 
                lowest multiple of $0.01.
    ``(c) Fractional Part of Barrel.--In the case of a fraction of a 
barrel, the tax imposed by subsection (a) shall be the same fraction of 
the amount of such tax imposed on the whole barrel.

``SEC. 5897. DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this chapter
            ``(1) Covered taxpayer.--
                    ``(A) In general.--The term `covered taxpayer' 
                means, with respect to any calendar quarter, any 
                taxpayer if--
                            ``(i) the average daily number of barrels 
                        of taxable crude oil extracted and imported by 
                        the taxpayer for calendar year 2019 exceeded 
                        300,000 barrels, or
                            ``(ii) the average daily number of barrels 
                        of taxable crude oil extracted and imported by 
                        the taxpayer for the calendar quarter exceeds 
                        300,000.
                    ``(B) Aggregation rules.--All persons treated as a 
                single employer under subsection (a) or (b) of section 
                52 or subsection (m) or (o) of section 414 shall be 
                treated as one person for purposes of paragraph (1).
            ``(2) Taxable crude oil.--The term `taxable crude oil' 
        includes crude oil, crude oil condensates, and natural 
        gasoline.
            ``(3) Barrel.--The term `barrel' means 42 United States 
        gallons.
            ``(4) United states.--The term `United States' has the same 
        meaning given such term under section 4612.
    ``(b) 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 on any taxable crude oil.
    ``(c) Records and Information.--Each taxpayer liable for tax under 
section 5896 shall keep such records, make such returns, and furnish 
such information (to the Secretary and to other persons having an 
interest in the taxable crude oil) with respect to such oil as the 
Secretary may by regulations prescribe.
    ``(d) 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.
    ``(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 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new item:

            ``Chapter 56. Windfall Profits on Crude Oil.''.

    (c) Effective Date.--The amendments made by this section shall 
apply to crude oil removed or entered after the date of the enactment 
of this Act, in calendar quarters ending after such date.

SEC. 3. GASOLINE PRICE REBATES.

    (a) In General.--Subchapter B of chapter 65 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new section:

``SEC. 6433. GASOLINE PRICE REBATES.

    ``(a) In General.--In the case of an eligible individual, there 
shall be allowed as a credit against the tax imposed by subtitle A for 
each taxable year beginning after the date of the enactment of the Big 
Oil Windfall Profits Tax Act, an amount equal to the sum of the 
gasoline price rebate amount for calendar quarters beginning in such 
taxable year.
    ``(b) Gasoline Price Rebate Amount.--For purposes of this section--
            ``(1) In general.--The term `gasoline price rebate amount' 
        means, with respect to any taxpayer for any calendar quarter 
        beginning in a taxable year, an amount determined by the 
        Secretary not later than 30 days after the end of such calendar 
        quarter taking into account the number of eligible individuals 
        and the amount of revenues in the Protect Consumers from Gas 
        Hikes Fund resulting from the tax imposed by section 5896 for 
        the preceding calendar quarter.
            ``(2) Special rule for joint returns.--In the case of an 
        eligible individual filing a joint return, the gasoline price 
        rebate amount shall be 150 percent of the amount determined 
        under paragraph (1) with respect to other taxpayers.
            ``(3) Limitation based on adjusted gross income.--The 
        amount of the credit allowed by subsection (a) (determined 
        without regard to this subsection and subsection (e)) shall be 
        reduced (but not below zero) by 5 percent of so much of the 
        eligible individual's adjusted gross income as exceeds--
                    ``(A) $150,000 in the case of a joint return,
                    ``(B) $112,500 in the case of a head of household, 
                and
                    ``(C) $75,000 in any other case.
    ``(c) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means any individual other than--
            ``(1) any nonresident alien individual,
            ``(2) any individual who is a dependent of another taxpayer 
        for a taxable year beginning in the calendar year in which the 
        individual's taxable year begins, and
            ``(3) an estate or trust.
    ``(d) Definitions and Special Rules.--
            ``(1) Dependent defined.--For purposes of this section, the 
        term `dependent' has the meaning given such term by section 
        152.
            ``(2) Identification number requirement.--
                    ``(A) In general.--In the case of a return other 
                than a joint return, the gasoline price rebate amount 
                in subsection (b)(1) shall be treated as being zero 
                unless the taxpayer includes the valid identification 
                number of the taxpayer on the return of tax for the 
                taxable year.
                    ``(B) Joint returns.--In the case of a joint 
                return, the gasoline price rebate amount in subsection 
                (b)(1) shall be treated as being--
                            ``(i) 50 percent of the amount otherwise 
                        determined without regard to this paragraph if 
                        the valid identification number of only 1 
                        spouse is included on the return of tax for the 
                        taxable year, and
                            ``(ii) zero if the valid identification 
                        number of neither spouse is so included.
                    ``(C) Valid identification number.--For purposes of 
                this paragraph, the term `valid identification number' 
                means a social security number issued to an individual 
                by the Social Security Administration on or before the 
                due date for filing the return for the taxable year.
                    ``(D) Special rule for members of the armed 
                forces.--Subparagraph (B) shall not apply in the case 
                where at least 1 spouse was a member of the Armed 
                Forces of the United States at any time during the 
                taxable year and the valid identification number of at 
                least 1 spouse is included on the return of tax for the 
                taxable year.
                    ``(E) Coordination with certain advance payments.--
                In the case of any payment determined pursuant to 
                subsection (f)(6), a valid identification number shall 
                be treated for purposes of this paragraph as included 
                on the taxpayer's return of tax if such valid 
                identification number is available to the Secretary as 
                described in such subsection.
                    ``(F) Mathematical or clerical error authority.--
                Any omission of a correct valid identification number 
                required under this paragraph shall be treated as a 
                mathematical or clerical error for purposes of applying 
                section 6213(g)(2) to such omission.
            ``(3) Credit treated as refundable.--The credit allowed by 
        subsection (a) shall be treated as allowed by subpart C of part 
        IV of subchapter A of chapter 1.
    ``(e) Coordination With Advance Refunds of Credit.--
            ``(1) Reduction of refundable credit.--The amount of the 
        credit which would (but for this paragraph) be allowable under 
        subsection (a) for any taxable year shall be reduced (but not 
        below zero) by the aggregate refunds and credits made or 
        allowed to the taxpayer (or, except as otherwise provided by 
        the Secretary, any dependent of the taxpayer) under subsection 
        (f) for such taxable year. Any failure to so reduce the credit 
        shall be treated as arising out of a mathematical or clerical 
        error and assessed according to section 6213(b)(1).
            ``(2) Joint returns.--Except as otherwise provided by the 
        Secretary, in the case of a refund or credit made or allowed 
        under subsection (f) with respect to a joint return, half of 
        such refund or credit shall be treated as having been made or 
        allowed to each individual filing such return.
    ``(f) Advance Refunds and Credits.--
            ``(1) In general.--Subject to paragraphs (5) and (6), for 
        any rebate taxable year, each individual who was an eligible 
        individual for the applicable taxable year shall be treated as 
        having made a payment against the tax imposed by chapter 1 for 
        such applicable taxable year in an amount equal to advance 
        refund amount for such rebate taxable year.
            ``(2) Advance refund amount.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the advance refund amount for any rebate taxable year 
                is the amount that would be allowed as a credit under 
                this section for the applicable taxable year if this 
                section (other than subsection (e) and this subsection) 
                were applied to such applicable taxable year (without 
                regard to any effective date) using the gasoline price 
                rebate amount for the refund taxable year.
                    ``(B) Treatment of deceased individuals.--For 
                purposes of determining the advanced refund amount--
                            ``(i) any individual who was deceased 
                        before the first day of the rebate taxable year 
                        shall be treated for purposes of applying 
                        subsection (d)(2) in the same manner as if the 
                        valid identification number of such person was 
                        not included on the return of tax for the 
                        applicable taxable year (except that 
                        subparagraph (D) thereof shall not apply), and
                            ``(ii) notwithstanding clause (i), in the 
                        case of a joint return with respect to which 
                        only 1 spouse is deceased before the first day 
                        of the rebate taxable year, such deceased 
                        spouse was a member of the Armed Forces of the 
                        United States at any time during the applicable 
                        taxable year, and the valid identification 
                        number of such deceased spouse is included on 
                        the return of tax for the applicable taxable 
                        year, the valid identification number of 1 (and 
                        only 1) spouse shall be treated as included on 
                        the return of tax for the applicable taxable 
                        year for purposes of applying subsection 
                        (d)(2)(B) with respect to such joint return.
            ``(3) Timing and manner of payments.--The Secretary shall, 
        subject to the provisions of this title, refund or credit any 
        overpayment attributable to this section and determined with 
        respect to any calendar quarter not later than 90 days after 
        the end of such calendar quarter. No refund or credit shall be 
        made or allowed under this subsection with respect to any 
        applicable taxable year after the last day of the rebate 
        taxable year.
            ``(4) No interest.--No interest shall be allowed on any 
        overpayment attributable to this subsection.
            ``(5) Application to individuals who have filed a return of 
        tax for the year after the applicable taxable year.--
                    ``(A) Application to returns filed at time of 
                initial determination.--If, at the time of any 
                determination made pursuant to paragraph (3), the 
                individual referred to in paragraph (1) has filed a 
                return of tax for the individual's first taxable year 
                beginning after the applicable taxable year, paragraph 
                (1) shall be applied with respect to such individual by 
                substituting `taxable year following the applicable 
                taxable year' for `applicable taxable year'.
                    ``(B) Additional payment.--
                            ``(i) In general.--In the case of any 
                        individual who files, before the additional 
                        payment determination date, a return of tax for 
                        such individual's first taxable year beginning 
                        after the applicable taxable year, the 
                        Secretary shall make a payment (in addition to 
                        any payment made under paragraph (1)) to such 
                        individual equal to the excess (if any) of--
                                    ``(I) the amount which would be 
                                determined under paragraph (1) (after 
                                the application of subparagraph (A)) by 
                                applying paragraph (1) as of the 
                                additional payment determination date, 
                                over
                                    ``(II) the amount of any payment 
                                made with respect to such individual 
                                under paragraph (1).
                            ``(ii) Additional payment determination 
                        date.--The term `additional payment 
                        determination date' means the earlier of--
                                    ``(I) the date which is 90 days 
                                after the date specified in section 
                                6072(a) with respect to returns for the 
                                taxable year following the applicable 
                                taxable year (determined after taking 
                                into account any period disregarded 
                                under section 7508A if such disregard 
                                applies to substantially all returns 
                                for such taxable year), or
                                    ``(II) September 1 of the calendar 
                                year following the applicable taxable 
                                year.
            ``(6) Application to certain individuals who have not filed 
        a return of tax for the preceding two years.--In the case of 
        any individual who, at the time of any determination made 
        pursuant to paragraph (3), has filed a tax return for neither 
        the applicable taxable year nor for the year following the 
        applicable taxable year, the Secretary shall, consistent with 
        rules similar to the rules of section 6428A(f)(5)(H)(i), apply 
        paragraph (1) on the basis of information available to the 
        Secretary and shall, on the basis of such information, 
        determine the advance refund amount with respect to such 
        individual without regard to subsection (b)(2) unless the 
        Secretary has reason to know that such amount would otherwise 
        be reduced by reason of such subsection.
            ``(7) Special rule related to time of filing return.--
        Solely for purposes of this subsection, a return of tax shall 
        not be treated as filed until such return has been processed by 
        the Internal Revenue Service.
            ``(8) Applicable taxable year; rebate taxable year.--For 
        purposes of this subsection--
                    ``(A) Rebate taxable year.--The term `rebate 
                taxable year' means the taxable year for which a credit 
                is allowed under this section.
                    ``(B) Applicable taxable year.--The term 
                `applicable taxable year' means the second taxable year 
                preceding the rebate taxable year.
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
or other guidance as may be necessary or appropriate to carry out the 
purposes of this section, including--
            ``(1) regulations or other guidance providing taxpayers the 
        opportunity to provide the Secretary information sufficient to 
        allow the Secretary to make payments to such taxpayers under 
        subsection (f) (including the determination of the amount of 
        such payment) if such information is not otherwise available to 
        the Secretary, and
            ``(2) regulations or other guidance to ensure to the 
        maximum extent administratively practicable that, in 
        determining the amount of any credit under subsection (a) and 
        any credit or refund under subsection (f), an individual is not 
        taken into account more than once, including by different 
        taxpayers and including by reason of a change in joint return 
        status or dependent status between the taxable year for which 
        an advance refund amount is determined and the taxable year for 
        which a credit under subsection (a) is determined.
    ``(h) Outreach.--The Secretary shall carry out a robust and 
comprehensive outreach program to ensure that all taxpayers described 
in subsection (g)(1) learn of their eligibility for the advance refunds 
and credits under subsection (f); are advised of the opportunity to 
receive such advance refunds and credits as provided under subsection 
(g)(1); and are provided assistance in applying for such advance 
refunds and credits.''.
    (b) Treatment of Certain Possessions.--
            (1) Payments to possessions with mirror code tax systems.--
        The Secretary of the Treasury shall pay to each possession of 
        the United States which has a mirror code tax system amounts 
        equal to the loss (if any) to that possession by reason of the 
        amendments made by this section. Such amounts shall be 
        determined by the Secretary of the Treasury based on 
        information provided by the government of the respective 
        possession.
            (2) Payments to other possessions.--The Secretary of the 
        Treasury shall pay to each possession of the United States 
        which does not have a mirror code tax system amounts estimated 
        by the Secretary of the Treasury as being equal to the 
        aggregate benefits (if any) that would have been provided to 
        residents of such possession by reason of the amendments made 
        by this section if a mirror code tax system had been in effect 
        in such possession. The preceding sentence shall not apply 
        unless the respective possession has a plan, which has been 
        approved by the Secretary of the Treasury, under which such 
        possession will promptly distribute such payments to its 
        residents.
            (3) Inclusion of administrative expenses.--The Secretary of 
        the Treasury shall pay to each possession of the United States 
        to which the Secretary makes a payment under paragraph (1) or 
        (2) an amount equal to the increase (if any) of the 
        administrative expenses of such possession--
                    (A) in the case of a possession described in 
                paragraph (1), by reason of the amendments made by this 
                section, and
                    (B) in the case of a possession described in 
                paragraph (2), by reason of carrying out the plan 
                described in such paragraph, or
        The amount described in subparagraph (A) shall be determined by 
        the Secretary of the Treasury based on information provided by 
        the government of the respective possession.
            (4) Coordination with credit allowed against united states 
        income taxes.--No credit shall be allowed against United States 
        income taxes under section 6433 of the Internal Revenue Code of 
        1986 (as added by this section), nor shall any credit or refund 
        be made or allowed under subsection (f) of such section, to any 
        person--
                    (A) to whom a credit is allowed against taxes 
                imposed by the possession by reason of the amendments 
                made by this section, or
                    (B) who is eligible for a payment under a plan 
                described in paragraph (2).
            (5) Mirror code tax system.--For purposes of this 
        subsection, the term ``mirror code tax system'' means, with 
        respect to any possession of the United States, the income tax 
        system of such possession if the income tax liability of the 
        residents of such possession under such system is determined by 
        reference to the income tax laws of the United States as if 
        such possession were the United States.
            (6) Treatment of payments.--For purposes of section 1324 of 
        title 31, United States Code, the payments under this 
        subsection shall be treated in the same manner as a refund due 
        from a credit provision referred to in subsection (b)(2) of 
        such section.
    (c) Administrative Provisions.--
            (1) Definition of deficiency.--Section 6211(b)(4)(A) of the 
        Internal Revenue Code of 1986 is amended by striking ``6428A, 
        6428B'' and inserting ``6428A, 6428B, 6433,''.
            (2) Exception from reduction or offset.--Any refund payable 
        by reason of section 6433(f) of the Internal Revenue Code of 
        1986 (as added by this section), or any such refund payable by 
        reason of subsection (b) of this section, shall not be--
                    (A) subject to reduction or offset pursuant to 
                subsection (c), (d), (e), or (f) of section 6402 of the 
                Internal Revenue Code of 1986 or any similar authority 
                permitting offset, or
                    (B) reduced or offset by other assessed Federal 
                taxes that would otherwise be subject to levy or 
                collection.
            (3) Conforming amendments.--
                    (A) Paragraph (2) of section 1324(b) of title 31, 
                United States Code, is amended by inserting ``6433,'' 
                after ``6431,''.
                    (B) The table of sections for subchapter B of 
                chapter 65 of the Internal Revenue Code of 1986 is 
                amended by adding at the end the following new item:

``Sec. 6433. Gasoline price rebates.''.

SEC. 4. PROTECT CONSUMERS FROM GAS PRICE HIKES FUND.

    (a) In General.--Subchapter A of chapter 98 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new section:

``SEC. 9512. PROTECT CONSUMERS FROM GAS PRICE HIKES FUND.

    ``(a) Establishment and Funding.--There is hereby established in 
the Treasury of the United States a trust fund to be referred to as the 
`Protect Consumers from Gas Hikes Fund', consisting of such amounts as 
may be appropriated or credited to such trust fund as provided for in 
this section and section 9602(b).
    ``(b) Transfers to the Protect Consumers From Gas Price Hikes 
Fund.--There are hereby appropriated to the Protect Consumers from Gas 
Hikes Fund amounts equivalent to the taxes received in the Treasury 
under section 5896.
    ``(c) Use of Funds.--The Secretary shall pay from time to time from 
the Protect Consumers from Gas Price Hikes Fund to the general fund of 
the Treasury amounts equal to the amounts of refunds provided under 
section 6433.''.
    (b) Clerical Amendment.--The table of sections for subchapter A of 
chapter 98 of such Code is amended by adding at the end the following 
new item:

``Sec. 9512. Protect Consumers from Gas Price Hikes Fund.''.
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