Yesterday, Congress passed the Tax Cuts and Jobs Act (TCJA)* – the most sweeping tax overhaul since 1986. TCJA cuts the corporate tax rate to 21% from 35%, while maintaining key oil and natural gas deductions (intangible drilling costs, percentage depletion and amortization of geological and geophysical costs).
Other key priorities for the industry include:
- Adoption of a modified international territorial system
- Reduction of tax rates for pass-through income
- Elimination of the corporate alternative minimum tax
- Authorization of lease sales in sections of the Arctic National Wildlife Refuge
- Additional priorities are captured in the attached summary.
The final bill – a product of seven weeks of lightning-fast legislating – was approved by Congress earlier this week along party lines. The law is a major victory for the Republican Party, as well as the oil and natural gas industry.
* On Dec 19, the official name for the legislation was changed to: “To provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018.”