Washington, D.C.– Rep. Raúl M. Grijalva today announced the introduction of H.R. 5995, the Closing Oil Spill Tax Loopholes Act, which would eliminate corporations’ ability to write off the cost of oil spill damages and settlements on tax returns. BP recently announced it will deduct approximately $9.9 billion from its 2010 tax obligations because the Oil Pollution Act of 1990 allows companies to write off the cost of oil spill damages.
“The tax code shouldn’t protect, and certainly shouldn’t reward, companies that do extensive damage to the American economy,” Grijalva said as he introduced the bill. “The people of this country are struggling to get and keep decent jobs. Corporations that post near-record profits one year shouldn’t be able to shirk their responsibilities to the economy the next year just because they caused the worst environmental disaster in U. S. history.”
Grijalva, who chairs the House National Parks, Forests, and Public Lands Subcommittee, has actively pursued legislative and oversight remedies for oil drilling since before the Deepwater Horizon explosion in April. In May, Grijalva introduced H.R. 5355 to retroactively remove all damage and liability caps for corporations responsible for offshore oil spills. The new bill complements that effort by amending the tax code to ensure companies liable for spills cannot recoup cleanup expenses by treating them as a loss of profit.
“This is not about punishing companies that just happened to have a bad year, because that’s the last thing we need to do,” Grijalva said. “This is about a lack of responsibility. If an oil company is responsible for a spill, it should pay for the cleanup and economic restoration that follows. As it is, the American people bear the cost by not collecting tax revenue. That needs to change immediately, and that’s why I introduced this bill.”