Windfall profits tax

(a) In general Subtitle E of the Internal Revenue Code of 1986 is amended by adding at the end thereof the following new chapter: 56 Windfall profits on crude oil Sec. 5896. Imposition of tax. Sec. 5897. Definitions and special rules. 5896. Imposition of tax (a) In general In addition to any other tax imposed under this title, in each calendar quarter there is hereby imposed on any covered taxpayer an excise tax at the rate determined under subsection (b) on— (1) each barrel of taxable crude oil extracted by the taxpayer within the United States and removed from the property of such taxpayer during the calendar quarter, and (2) each barrel of taxable crude oil entered into the United States during the calendar quarter by the taxpayer for consumption, use, or warehousing. (b) Rate of tax (1) In general The rate of tax imposed by this section on any barrel of taxable crude oil for any calendar quarter is the product of— (A) 50 percent, and (B) the excess (if any) of— (i) the average price of a barrel of Brent crude oil over the covered calendar quarter, over (ii) the average price of a barrel of Brent crude oil over the period beginning on January 1, 2025, and ending on December 31, 2025. (2) Inflation adjustment (A) In general In the case of a calendar quarter beginning in any taxable year beginning after 2026, the amount determined under paragraph (1)(B)(ii) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting 2025 for 2016 in subparagraph (A)(ii) thereof. (B) Rounding If any dollar amount, after being increased under subparagraph (A), is not a multiple of $0.50, such dollar amount shall be rounded to the next lowest multiple of $0.01. (c) Fractional part of barrel In the case of a fraction of a barrel, the tax imposed by subsection (a) shall be the same fraction of the amount of such tax imposed on the whole barrel. 5897. Definitions and special rules (a) Definitions For purposes of this chapter— (1) Covered taxpayer (A) In general The term covered taxpayer means, with respect to any calendar quarter, any taxpayer if— (i) the average daily number of barrels of taxable crude oil extracted and imported by the taxpayer for calendar year 2025 exceeded 300,000 barrels, or (ii) the average daily number of barrels of taxable crude oil extracted and imported by the taxpayer for the calendar quarter exceeds 300,000. (B) Aggregation rules All persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as one person for purposes of paragraph (1). (2) Taxable crude oil The term taxable crude oil includes crude oil, crude oil condensates, and natural gasoline. (3) Barrel The term barrel means 42 United States gallons. (4) United States The term United States has the same meaning given such term under section 4612. (b) Withholding and deposit of tax The Secretary shall provide such rules as are necessary for the withholding and deposit of the tax imposed under section 5896 on any taxable crude oil. (c) Records and information Each taxpayer liable for tax under section 5896 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) with respect to such oil as the Secretary may by regulations prescribe. (d) Return of windfall profit tax The Secretary shall provide for the filing and the time of such filing of the return of the tax imposed under section 5896. (e) Regulations The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this chapter.. (b) Clerical amendment The table of chapters for subtitle E of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Chapter 56. Windfall profit on crude oil. (c) Effective date (1) In general The amendments made by this section shall apply to crude oil removed or entered after December 31, 2025, in calendar quarters ending after such date. (2) Special rule for certain quarters during 2026 In the case of any calendar quarter ending before July 1, 2026, the tax imposed under section 5896 of the Internal Revenue Code of 1986 (as added by this section) shall not be due before September 30, 2026.