Representative Alcee Hastings, (D-FL), introduced a bill that would abolish write-offs oil companies take on their tax returns for the costs of cleaning up their oil spills.
Taxpayers have footed oil companies’ cleanup costs for decades. For instance, BP can deduct on its tax returns cleanup costs and settlements for its massive oil spill in the Gulf of Mexico. Estimates already show those costs may amount to $32 billion, which could translate into a $10 billion tax write-off for the oil major.
But these deductions are meant for the "ordinary costs of doing business," reads the tax law.
Are oil spills “business as usual’? Or should taxpayers foot the bill for oil companies’ own negligence?
Rep. Hastings’ legislation is a companion bill to S. 983, which Sen. Bill Nelson, (D-FL), introduced by last May
The Joint Committee on Taxation estimates that slamming this loophole shut would save taxpayers an average $1.3 billion annually.
“Unlike other regular expenses, oil spills are simply not part of the ‘cost of doing business.’ BP needs to fully compensate Americans for what we lost as a result of its reckless pursuit of profits – and not cut corners by abusing tax loopholes,” Jacqueline Savitz, an official with Oceana, an environmental group, said in a statement.
The Macondo well blast killed 11 people, and injured 16, in the spring of 2010. Savitz adds in her statement that the spill was responsible for “destroying tourism and fisheries industries, spilling 200 million gallons of oil and killing hundreds of turtles, dolphins and other ocean life,” noting an oil spill “is not, and should never be, considered a normal cost of doing business. It is bad business, and not what was intended when the tax write-off was established.”
Rep. Hastings says in a statement that “a big oil company can treat the costs of an oil spill as if it was the same as purchasing a stapler or paying a phone bill. I believe that an oil spill should not be considered ‘ordinary.’ From a fiscal standpoint, from a policy standpoint, and from a moral standpoint, even a small oil spill is an extraordinary and terrible mistake with far-reaching consequences.”
Elizabeth MacDonald joined FOX Business Network (FBN) as stocks editor in September 2007.
Follow Elizabeth MacDonald on Twitter @LizMacDonaldFOX.