Temporary windfall profits tax

(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:

Temporary windfall profits on crude oil

Sec. 5896. Imposition of tax.

Sec. 5897. Windfall profit; etc.

Sec. 5898. Special rules and definitions.

5896.

Imposition of tax

(a)

In general

In addition to any other tax imposed under this title, there is hereby imposed on any applicable taxpayer an excise tax in an amount equal to 50 percent of the windfall profit of such taxpayer for any taxable year beginning during 2005 or 2006. (b)

Applicable taxpayer

For purposes of this chapter, the term applicable taxpayer means, with respect to operations in the United States— (1)any integrated oil company (as defined in section 291(b)(4)), and (2)any other producer or refiner of crude oil with gross receipts from the sale of such crude oil or refined oil products for the taxable year exceeding $100,000,000.

5897.

Windfall profit; etc

(a)

General rule

For purposes of this chapter, the term windfall profit means the excess of the adjusted taxable income of the applicable taxpayer for the taxable year over the reasonably inflated average profit for such taxable year. (b)

Adjusted taxable income

For purposes of this chapter, with respect to any applicable 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 applicable 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.

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)

Crude oil

The term crude oil includes crude oil condensates and natural gasoline. (e)

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. (f)

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. Temporary windfall profit on crude oil.

(c)

Deductibility of windfall profit tax

The first sentence of section 164(a) of the Internal Revenue Code of 1986 (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)

Hurricane Relief Trust Fund

(1)

In general

Subchapter A of chapter 98 of the Internal Revenue Code of 1986 (relating to trust fund code) is amended by adding at the end the following new section:

9511.

Hurricane Relief Trust Fund

(a)

Establishment

There is established in the Treasury of the United States a trust fund to be known as the Hurricane Relief Trust Fund, consisting of such amounts as may be appropriated or credited to such Fund as provided in this section or section 9602(b). (b)

Transfers to Fund

There are hereby appropriated to the Hurricane Relief Trust Fund amounts equivalent to the taxes received in the Treasury under section 5896. (c)

Expenditures

Amounts in the Hurricane Relief Trust Fund shall be available, without further appropriation, to offset the supplemental spending bills that are targeted to aid victims of Hurricanes Katrina and Rita enacted after the date of the enactment of this section and before January 1, 2008. Any funds that have not been expended by December 31, 2008, shall be credited back to the General Fund as regular tax receipts.

(2)

Clerical amendment

The table of sections for such subchapter is amended by adding at the end the following new item:

Sec. 9511. Hurricane Relief Trust Fund.

(e)

Effective dates

(1)

In general

Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning in 2005 and 2006. (2)

Subsection (c)

The amendments made by subsection (d) shall take effect on the date of the enactment of this Act.