Crude Oil Windfall Profit Tax Act of 1980, United States
Published: September 4, 2008, 10:15 pm
Updated: September 4, 2008, 10:15 pm
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Cutler J. ClevelandCongress enacted the Crude Oil WIndfall Profit Tax Act in 1980 in response to the excessive "windfall profits" (unexpected profits resulting from some event not controlled by those who are profiting) that oil producers were earning following the deregulation of oil prices. The Act imposed a windfall profit tax on domestically produced crude oil beginning after February 29, 1980, that ranged from 30 to 70 percent of the producer's windfall profit.
The Act defined three categories of oil taxed:
- Tier one consists of all domestically produced oil not explicitly placed in either tier two or tier three, or is exempt from the windfall profit tax.
- Tier two includes oil produced from a stripper well property and oil from the Naval Petroleum Reserve.
- Tier three oil consists of oil discovered after 1978, heavy oil, and incremental tertiary oil.
This act provided a tax credit of $3 per barrel of tar sands oil-equivalent to producers of alternative energy sources. Congress intended to use a substantial portion of the revenues from the windfall profit tax of crude oil to finance the tax credit for alternative fuels. The Omnibus Trade and Competitiveness Act of 1988 repealed the Crude Oil Windfall Profit Tax Act.
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Robyn Kenney (Lead Author);Cutler J. Cleveland (Topic Editor) "Crude Oil Windfall Profit Tax Act of 1980, United States". In: Encyclopedia of Earth. Eds. Cutler J. Cleveland (Washington, D.C.: Environmental Information Coalition, National Council for Science and the Environment). [First published in the Encyclopedia of Earth September 4, 2008; Last revised Date September 4, 2008; Retrieved May 24, 2013 <http://www.eoearth.org/article/Crude_Oil_Windfall_Profit_Tax_Act_of_1980,_United_States>
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The Encyclopedia of Earth Robyn Kenney graduated from Boston University with a BA in Environmental Science in 2002 and a MA in Energy and Environmental Analysis in 2007. As an undergraduate she was active as the President of the Environmental Student Organization for two years. She coordinated awareness efforts throughout campus and established open communication lines between students, BU staff & administrators to undertake a collaborative step towards improving recycling on ca ... (Full Bio)
Congress enacted the Crude Oil WIndfall Profit Tax Act in 1980 in response to the excessive "windfall profits" (unexpected profits resulting from some event not controlled by those who are profiting) that oil producers were earning following the deregulation of oil prices. The Act imposed a windfall profit tax on domestically produced crude oil beginning after February 29, 1980, that ranged from 30 to 70 percent of the producer's windfall profit.
The Act defined three categories of oil taxed:
- Tier one consists of all domestically produced oil not explicitly placed in either tier two or tier three, or is exempt from the windfall profit tax.
- Tier two includes oil produced from a stripper well property and oil from the Naval Petroleum Reserve.
- Tier three oil consists of oil discovered after 1978, heavy oil, and incremental tertiary oil.
This act provided a tax credit of $3 per barrel of tar sands oil-equivalent to producers of alternative energy sources. Congress intended to use a substantial portion of the revenues from the windfall profit tax of crude oil to finance the tax credit for alternative fuels. The Omnibus Trade and Competitiveness Act of 1988 repealed the Crude Oil Windfall Profit Tax Act.
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