Jul 17, 2017 Comments to the U.S. Senate Committee on Finance Request for Stakeholder Input on Tax Reform
The Independent Petroleum Association of America (IPAA) and its Cooperating Associations submit the following comments in response to the request for stakeholder input to the Senate Finance Committee’s consideration of tax reform. Collectively, these organizations represent the thousands of independent oil and natural gas explorers and producers, as well as the millions of royalty owners, in the United States that would be adversely affected by changes to Intangible Drilling Costs (IDC), the Percentage Depletion deduction and the Passive Loss Exception for Working Oil and Gas Interests. As defined by the Internal Revenue Code (IRC) Section 613(A), an independent producer is a producer that does not have more than $5 million in retail sales of oil and gas in a year or one that does not refine more than an average of 75,000 barrels per day of crude oil in a given year. Independent producers drill about 95 percent of American oil and natural gas wells, produce about 54 percent of American oil, and more than 85 percent of American natural gas. Independent producers historically reinvest over 100 percent of American oil and natural gas cash flow back into new American production.