Tax on crude oil and natural gas produced from the outer Continental Shelf in the Gulf of Mexico

(a) In general Subtitle E of the Internal Revenue Code of 1986 is amended by adding at the end the following new chapter: 56 Tax on severance of crude oil and natural gas from the outer Continental Shelf in the Gulf of Mexico Sec. 5901. Imposition of tax. Sec. 5902. Taxable crude oil or natural gas and removal price. Sec. 5903. Special rules and definitions. 5901. Imposition of tax (a) In general In addition to any other tax imposed under this title, there is hereby imposed a tax equal to 13 percent of the removal price of any taxable crude oil or natural gas removed from the premises during any taxable period. (b) Credit for Federal royalties paid (1) In general There shall be allowed as a credit against the tax imposed by subsection (a) with respect to the production of any taxable crude oil or natural gas an amount equal to the aggregate amount of royalties paid under Federal law with respect to such production. (2) Limitation The aggregate amount of credits allowed under paragraph (1) to any taxpayer for any taxable period shall not exceed the amount of tax imposed by subsection (a) for such taxable period. (c) Tax paid by producer The tax imposed by this section shall be paid by the producer of the taxable crude oil or natural gas. 5902. Taxable crude oil or natural gas and removal price (a) Taxable crude oil or natural gas For purposes of this chapter, the term taxable crude oil or natural gas means crude oil or natural gas which is produced from Federal submerged lands on the outer Continental Shelf in the Gulf of Mexico pursuant to a lease entered into with the United States which authorizes the production. (b) Removal price For purposes of this chapter— (1) In general Except as otherwise provided in this subsection, the term removal price means— (A) in the case of taxable crude oil, the amount for which a barrel of such crude oil is sold, and (B) in the case of taxable natural gas, the amount per 1,000 cubic feet for which such natural gas is sold. (2) Sales between related persons In the case of a sale between related persons, the removal price shall not be less than the constructive sales price for purposes of determining gross income from the property under section 613. (3) Oil or natural gas removed from property before sale If crude oil or natural gas is removed from the property before it is sold, the removal price shall be the constructive sales price for purposes of determining gross income from the property under section 613. (4) Refining begun on property If the manufacture or conversion of crude oil into refined products begins before such oil is removed from the property— (A) such oil shall be treated as removed on the day such manufacture or conversion begins, and (B) the removal price shall be the constructive sales price for purposes of determining gross income from the property under section 613. (5) Property The term property has the meaning given such term by section 614. 5903. Special rules and definitions (a) Administrative requirements (1) Withholding and deposit of tax The Secretary shall provide for the withholding and deposit of the tax imposed under section 5901 on a quarterly basis. (2) Records and information Each taxpayer liable for tax under section 5901 shall keep such records, make such returns, and furnish such information (to the Secretary and to other persons having an interest in the taxable crude oil or natural gas) with respect to such oil as the Secretary may by regulations prescribe. (3) Taxable periods; return of tax (A) Taxable period Except as provided by the Secretary, each calendar year shall constitute a taxable period. (B) Returns The Secretary shall provide for the filing, and the time for filing, of the return of the tax imposed under section 5901. (b) Definitions For purposes of this chapter— (1) Producer The term producer means the holder of the economic interest with respect to the crude oil or natural gas. (2) Crude oil The term crude oil includes crude oil condensates and natural gasoline. (3) Premises and crude oil product The terms premises and crude oil product have the same meanings as when used for purposes of determining gross income from the property under section 613. (c) Adjustment of removal price In determining the removal price of oil or natural gas from a property in the case of any transaction, the Secretary may adjust the removal price to reflect clearly the fair market value of oil or natural gas removed. (d) Regulations The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this chapter.. (b) Deductibility of tax The first sentence of section 164(a) of the Internal Revenue Code of 1986 is amended by inserting after paragraph (4) the following new paragraph: (5) The tax imposed by section 5901(a) (after application of section 5901(b)) on the severance of crude oil or natural gas from the outer Continental Shelf in the Gulf of Mexico.. (c) Clerical amendment The table of chapters for subtitle E is amended by adding at the end the following new item: Chapter 56. Tax on severance of crude oil and natural gas from the outer Continental Shelf in the Gulf of Mexico.. (d) Effective date The amendments made by this section shall apply to crude oil or natural gas removed after December 31, 2025.