House okays tax extension package, without oil company penalties

Washington (Platts)--9Dec2005

The US House of Representatives has approved a $56-bil tax cut extension
package that is at odds with a competing Senate bill that seeks to impose
new taxes on big oil companies.

     By a 234-197 vote on Thursday, largely along party lines, the House now
sends its bill to be reconciled with the Senate in a joint negotiating
session. The Senate in November passed a $60-bil tax cut extension bill that
would repeal the last-in, first-out credit method of valuing oil inventories
for 2005. Critics of the tax call it a back-door effort to impose a windfall
profit tax on the oil industry, which reaped record third-quarter profits on
the back of soaring world oil prices. 

     The White House has threatened to veto the overall bill if House and
Senate negotiators agree to keep the inventory provision in the final bill; it
could generate nearly $5-bil for federal coffers. 

     Several lobbyists and congressional sources say a final agreement on the
negotiated bill would be unlikely by the end of the year, and that House
negotiators' acceptance of the inventory tax change is implausible.

				--Cathy Landry, cathy_landry@platts.com

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