Alternative Fuel Mixture Credit

Floor Speech

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Mr. WYDEN. That is correct. All gasoline includes butane and, as far as I am aware, always has. Adding butane during the gasoline refining process is simply how gasoline is produced. The idea that Congress intended oil companies to benefit from a credit intended to reduce our dependence on traditional gasoline by rewarding them for making traditional gasoline doesn't pass the commonsense test. This is why the Internal Revenue Service has correctly denied such claims. However, the oil industry is litigating this issue in the hopes of winning a nearly $50 billion windfall for producing gasoline the same way they have for a century. Mr. Chairman, am I correct that Congress never intended for gasoline to qualify for this credit based on its butane content?

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Mr. WYDEN. Thank you for that background, Mr. Chairman. I agree with you that it is clear that the benefit some in the oil and gas industry are seeking from this provision is illegitimate. However, given the significant amount of taxpayer dollars at stake should these companies somehow prevail in litigation, it is also important for Congress to provide clarity in this area, to protect the public purse. The tax package under consideration in the spending bill addresses this by amending the alternative fuel mixture credit to more explicitly deny the credit for butane mixed with gasoline, consistent congressional intent. This clarification is effective for any claims filed on or after January 8, 2018, when the IRS issued a formal revenue ruling putting taxpayers on notice that a mixture of butane and gasoline does not qualify for the credit. However, this does not mean we agree that such mixtures prior to January 8, 2018, qualify for the credit, and, in fact, we are of the opinion that they do not. Do you agree Mr. Chairman?

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