National headlines have some questioning whether the oil and natural gas industry pays its “fair share” in taxes to the communities in which we operate. With recent proposals to raise taxes on our Industry circulating in Congress it is important members of CAN are up to date on how this could impact Chevron, our industry and our economic future.
The U.S. tax code is complex, but at its core is a framework providing all companies – regardless of economic sector – a level playing field that incentivizes them to invest, build, and expand their business to support local job growth.
It is important to remember that tax deductions are not subsidies, but commonplace provisions used by all sectors of the U.S. economy. The oil and natural gas industry is eligible for many of the ordinary deductions in which companies are taxed only on real income, allowing our business to write off expenses and investments in growth that lead to additional tax revenue from the communities and regions where we operate.
In addition to billions in federal contributions, energy producing states also impose taxes or collect fees on natural resource development. While each state has their own unique approach, most levy this tax in the form of a severance tax on top of traditional corporate and business taxes. Revenues generated from severance taxes fund a variety of public programs, community development organizations, conservation and reclamation efforts, among others. Including:
Important facts are often left out of conversations surrounding energy tax policy. We need to use our collective voices to amplify the importance of America’s domestic energy industry and how it increases economic opportunity in all industries. As policymakers on Capitol Hill weigh different tax reform policies over the coming months, we will advocate for commonsense policies that foster new business investments and enable our industry to grow, while at the same time making meaningful contributions to the American economy.