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BP taking $10 billion tax credit from Gulf spill

marketwatch.com -- Credit is allowed under federal rules, company says in earnings report

BP PLC will reduce its contribution to U.S. coffers by roughly $10 billion due to a tax credit the company is claiming it incurred from the Gulf of Mexico oil spill.

The oil giant said Tuesday that it is incurring a charge of $32.2 billion from the Deepwater Horizon disaster response, and as such, it is claiming a $9.9 billion taxation credit.

Asked in a conference call Tuesday about whether it has discussed the tax credit with President Barack Obama's administration, BP's outgoing chief executive, Tony Hayward said: "We have followed the IRS regulations as they're currently written."

The Internal Revenue Service said it's not allowed under federal law to discuss individual taxpayer issues.

But the issue

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Submitted Jul 30, 2010 By: teafortwo

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egd Champion Author Twin Cities Posts:4,050 Points:1,331,685 Joined:Mar 2005	Message Posted: Jul 31, 2010 9:54:38 PM Ignore egd Report Abuse its the law, who wrote it
rjhenn Champion Author Kansas Posts:10,830 Points:1,276,535 Joined:Aug 2005	Message Posted: Jul 31, 2010 11:20:22 AM Ignore rjhenn Report Abuse Business taxes are based on profit. Their profit went down, so their taxes go down.
honda0105 Champion Author Tallahassee Posts:10,740 Points:629,450 Joined:Nov 2008	Message Posted: Jul 31, 2010 6:00:52 AM Ignore honda0105 Report Abuse My only hope is that they will be found to have acted negligent, thus, their per barrel fine of about $1,000 per gallon will go up to $4,000. That should take care of the tax credit and the money they make on the side.
honda0105 Champion Author Tallahassee Posts:10,740 Points:629,450 Joined:Nov 2008	Message Posted: Jul 31, 2010 5:58:33 AM Ignore honda0105 Report Abuse hope they will not get to keep the tax credit! John, this is money back in their pocket. Money they can use for paying Tony Hayward and others.
John747 Champion Author Chicago Posts:379,790 Points:2,645,560 Joined:Aug 2001	Message Posted: Jul 31, 2010 4:10:56 AM Ignore John747 Report Abuse One thing to remember is that all companies, including BP, only collect the TAXES. They pass these taxes on down to the customers through higher prices so we end up paying these taxes. When Congress increases taxes on these "evil" corporations they're really increasing taxes on you and I. Congress hopes we never catch on to that fact!
joel27nc Champion Author Raleigh Posts:5,518 Points:885,745 Joined:Mar 2008	Message Posted: Jul 30, 2010 10:20:55 PM Ignore joel27nc Report Abuse If the loophole exists, BP should get it.
mstearno Champion Author Dayton Posts:3,576 Points:795,390 Joined:Jan 2008	Message Posted: Jul 30, 2010 10:19:44 PM Ignore mstearno Report Abuse why shouldn't they get what they deserve If they go bankrupt guess whos going to pay for the clean up?
REKEY Champion Author South Carolina Posts:3,632 Points:727,525 Joined:May 2008	Message Posted: Jul 30, 2010 10:15:32 PM Ignore REKEY Report Abuse Figures!
TIGERPAW46 Champion Author Florida Posts:2,776 Points:523,325 Joined:Mar 2004	Message Posted: Jul 30, 2010 10:14:24 PM Ignore TIGERPAW46 Report Abuse It's allowed, If you want them to pay additional moneys for negligence or criminal acts resulting in deaths and damage, then charge them under criminal laws. But taking losses off income is normal for any business. They are already being sued in Civil court.
Sody33 Champion Author Las Vegas Posts:13,067 Points:1,503,725 Joined:Oct 2005	Message Posted: Jul 30, 2010 10:13:00 PM Ignore Sody33 Report Abuse See, I said that the big tycoons all have tax men to figure out how they can avoid paying taxes and bounce it off the working stiffs.
Gary65 Champion Author Toronto Posts:1,497 Points:464,000 Joined:Jan 2009	Message Posted: Jul 30, 2010 10:12:17 PM Ignore Gary65 Report Abuse Ridiculous,just like the buyout the former BP CEO got.
TheSicilian Veteran Author Jacksonville Posts:434 Points:490,710 Joined:Feb 2009	Message Posted: Jul 30, 2010 10:09:55 PM Ignore TheSicilian Report Abuse They should get a credit why should the get hit twice for the same problem
Bus561 Champion Author Lexington Posts:11,477 Points:2,240,675 Joined:May 2004	Message Posted: Jul 30, 2010 10:09:11 PM Ignore Bus561 Report Abuse By all means they should take about a 100 million dollar credit. What a joke.
Blue_Cruzer Champion Author Lexington Posts:2,993 Points:770,460 Joined:Mar 2007	Message Posted: Jul 30, 2010 10:08:47 PM Ignore Blue_Cruzer Report Abuse Should not be allowed, the spill was due there cutting corners.
rxman1 Champion Author Toledo Posts:4,340 Points:906,405 Joined:Nov 2007	Message Posted: Jul 30, 2010 10:03:44 PM Ignore rxman1 Report Abuse BP still has to pay the money up front. No profits for years.
DrCashFlow Champion Author Massachusetts Posts:2,439 Points:692,450 Joined:Jun 2008	Message Posted: Jul 30, 2010 10:03:11 PM Ignore DrCashFlow Report Abuse classic duck the question non-answer.
OGW Champion Author London Posts:1,351 Points:669,665 Joined:Sep 2005	Message Posted: Jul 30, 2010 10:00:22 PM Ignore OGW Report Abuse That really sucks.
JimL1 Champion Author Phoenix Posts:3,133 Points:385,995 Joined:Jul 2003	Message Posted: Jul 30, 2010 9:57:58 PM Ignore JimL1 Report Abuse Simplify the tax code. Do away this corporate welfare.
96sc1 Champion Author El Paso Posts:5,556 Points:727,715 Joined:Mar 2008	Message Posted: Jul 30, 2010 9:53:15 PM Ignore 96sc1 Report Abuse This is Rangel's fault. hahahahaha
DarthDadJr Champion Author Virginia Posts:3,323 Points:643,585 Joined:Jul 2008	Message Posted: Jul 30, 2010 9:41:43 PM Ignore DarthDadJr Report Abuse Unfortunately, if this is part of the tax code that exists, then they have the right to take advantage of it. Another reason our tax code needs a major overhaul.
vollee Veteran Author Cincinnati Posts:283 Points:240,250 Joined:Dec 2007	Message Posted: Jul 30, 2010 9:41:33 PM Ignore vollee Report Abuse The morons and dunderheads who populate this website are out in full force. The IRS sets no tax laws. They are a beauracratic organiziation charged with administering and collecting taxes as set by our illustrious and esteemed Congress. If you have a beef with taxes applied -whether it be with BP or your own return - talk your your congressperson. And O'Bummer is to blame for a lot of the ills and shortcomings today in the USA but not this one. BP is doing as any corporate entity has the right to do - deduct ordinary and extraordinary expenses.
dabuzman Champion Author Seattle Posts:3,804 Points:999,825 Joined:Apr 2006	Message Posted: Jul 30, 2010 9:41:01 PM Ignore dabuzman Report Abuse Yap we the taxes payer paid again. They should have had to pay more taxes not get a tax credit.
RENEGADEGAS Champion Author Missouri Posts:7,653 Points:616,155 Joined:Jul 2008	Message Posted: Jul 30, 2010 9:40:33 PM Ignore RENEGADEGAS Report Abuse See where going green gets you.
RedRam2005 Champion Author San Antonio Posts:3,544 Points:601,275 Joined:Dec 2007	Message Posted: Jul 30, 2010 9:38:01 PM Ignore RedRam2005 Report Abuse Our government is so smart, it allows companies to fleece the public again. But that should be no surprise, Congress and the Government Agencies fleece the public on a daily basis.
DosEquis26 Champion Author Chicago Posts:1,932 Points:1,090,110 Joined:Jun 2006	Message Posted: Jul 30, 2010 9:27:27 PM Ignore DosEquis26 Report Abuse We pay half the taxes the Europeans do.
ShadowACE Champion Author Boston Posts:3,958 Points:1,170,470 Joined:Jun 2006	Message Posted: Jul 30, 2010 9:24:52 PM Ignore ShadowACE Report Abuse Instead of bashing BP for taking tax credits that are allowed by law, why don't we try bashing some of the politicians who have created those laws? I paid a ton of taxes this year, and I'm seeing in the news that my taxes may go up substantially next year. (I believe that the only ones in the world who think that I am among the "wealthy" are the government and my kids.) When it's time to file my return I will try very hard to take advantage of every little deduction or credit that will help to reduce my taxes. Why would BP, and every other tax-paying corporation, do any less? They have herds of expensive lawyers and accountants to be sure they don't miss any of those benefits. I wish I could afford some of those to help me. Do you not do the same thing at tax time? I'll bet you do. Would you expect to be castigated in this manner for your actions? Why not? Think about it. BP has plenty to answer for, but they still have a responsibility to their shareholders to conduct their business in a businesslike manner. Your pension fund may be one of their major shareholders.
aggietim Rookie Author Fort Worth Posts:42 Points:87,440 Joined:Oct 2008	Message Posted: Jul 30, 2010 9:23:36 PM Ignore aggietim Report Abuse so, the taxpayers are footing the cill again
jb107 Champion Author New Jersey Posts:4,685 Points:1,644,235 Joined:Sep 2005	Message Posted: Jul 30, 2010 9:22:10 PM Ignore jb107 Report Abuse I knew that we were going to end up paying for it.
FlogNut Champion Author Chicago Posts:61,345 Points:1,043,175 Joined:Oct 2007	Message Posted: Jul 30, 2010 9:21:20 PM Ignore FlogNut Report Abuse I see one of the commenters seems truly upset that the Gulf oil leak has killed some birds. Don't worry our Imperious Federal Government will issue fines to BP for many of the birds that have been killed. It would be nice if our government also issued fines to windmill operators for killing migratory birds. I guess it's OK if the "green" people are killing the birds.
TFowler513 Champion Author Memphis Posts:2,367 Points:586,610 Joined:Mar 2008	Message Posted: Jul 30, 2010 9:20:21 PM Ignore TFowler513 Report Abuse Just another reason to deploy alternatives.
Chris46 Champion Author Dayton Posts:11,021 Points:1,247,275 Joined:Sep 2005	Message Posted: Jul 30, 2010 9:15:20 PM Ignore Chris46 Report Abuse That's what BP pays it high-priced lawyers to do. Find loopholes in the law.
vegaland Champion Author Houston Posts:2,403 Points:501,795 Joined:May 2006	Message Posted: Jul 30, 2010 9:14:55 PM Ignore vegaland Report Abuse It's an expense, it should be deductable.
FlogNut Champion Author Chicago Posts:61,345 Points:1,043,175 Joined:Oct 2007	Message Posted: Jul 30, 2010 9:13:11 PM Ignore FlogNut Report Abuse BP is only doing what the idiots in Congress (Democrat & Republican) wrote into our tax laws. If you have a complaint you should send a quick note out to your Senators and Representative. And remember to ask each of them if they happened to vote for some of the tax breaks that BP is taking advantage of. BTW - don't expect an honest answer from any of them!!!
investmentdr All-Star Author Cleveland Posts:516 Points:527,940 Joined:Sep 2008	Message Posted: Jul 30, 2010 9:12:15 PM Ignore investmentdr Report Abuse the law is the law
signwiz Champion Author Indiana Posts:1,091 Points:935,575 Joined:Feb 2006	Message Posted: Jul 30, 2010 9:10:31 PM Ignore signwiz Report Abuse Ha-ha... develop a tax code that defies deciphering by all but the most devious of minds, and what do you expect? Those with all the money will keep it, and those with little will lose what little they have.
Lukus Champion Author Halifax Posts:3,484 Points:708,265 Joined:Nov 2007	Message Posted: Jul 30, 2010 9:08:01 PM Ignore Lukus Report Abuse Naturally the tax payers get to pay.
cableman31 Champion Author New York Posts:4,031 Points:1,068,860 Joined:May 2004	Message Posted: Jul 30, 2010 9:06:47 PM Ignore cableman31 Report Abuse Not a surprising developement. Neither is the fact the new CEO want to cut oil cleanup expenses.
carlsonguitars Champion Author Portland Posts:4,214 Points:698,025 Joined:Jan 2008	Message Posted: Jul 30, 2010 9:05:08 PM Ignore carlsonguitars Report Abuse Freaking THIEVES!!! First they ruin our environment, kill aquatic life, birds, animals, etc. - RUIN THE LOCAL ECONOMIES and hurt the economy in general - They stall and deny (or negotiate) settlements - all while they are RIPPING US OFF WITH OVER PRICED OIL AND GAS!!! - they already get oil subsidies from the government, NOW THEY DO NOT WANT TO PAY THEIR TAXES!!!!! GIVE ME A BREAK!!!!!!! As if $20 BILLION PROFIT IN ONE YEAR isn't enough!!!!!
LCSTEELERBOB Champion Author Gary Posts:1,588 Points:366,895 Joined:Oct 2008	Message Posted: Jul 30, 2010 9:00:33 PM Ignore LCSTEELERBOB Report Abuse mr. & mrs. USA public will feel the bad side of this all
Manual_Shifter Veteran Author New Brunswick Posts:329 Points:527,640 Joined:Jan 2004	Message Posted: Jul 30, 2010 8:59:56 PM Ignore Manual_Shifter Report Abuse Hey now! Let's not let them smack the taxpayer all over again! Change the law and make it retroactive - not a penny of any credit advantage should go to BP until all of their "sins" are paid for!!
FordF2502001 Champion Author Mississippi Posts:3,061 Points:664,225 Joined:Sep 2008	Message Posted: Jul 30, 2010 8:56:37 PM Ignore FordF2502001 Report Abuse Shows how screwed up the IRS is.
toadNY Champion Author Albany Posts:1,701 Points:541,685 Joined:Apr 2008	Message Posted: Jul 30, 2010 8:49:55 PM Ignore toadNY Report Abuse In the long run we will pay them more than the spill.
rimpyCA Champion Author Los Angeles Posts:1,550 Points:323,475 Joined:Aug 2009	Message Posted: Jul 30, 2010 8:44:56 PM Ignore rimpyCA Report Abuse they will cover their expanses some how or the other
altima2008 Champion Author Philadelphia Posts:3,234 Points:766,035 Joined:Apr 2008	Message Posted: Jul 30, 2010 8:42:58 PM Ignore altima2008 Report Abuse Basically like I said before BP is going to get off the hook. Be negligent and get rewarded for it!
30mpg80 Champion Author Lexington Posts:1,337 Points:509,020 Joined:Nov 2008	Message Posted: Jul 30, 2010 8:41:20 PM Ignore 30mpg80 Report Abuse Would take more than this space to list tax breaks for oil industry
sabob Champion Author Pennsylvania Posts:1,697 Points:226,650 Joined:Dec 2008	Message Posted: Jul 30, 2010 8:32:44 PM Ignore sabob Report Abuse if it's a business expense, which it is, then they deserve it, that's the law
amor78 Rookie Author Richmond Posts:58 Points:145,385 Joined:Jul 2006	Message Posted: Jul 30, 2010 8:08:30 PM Ignore amor78 Report Abuse getting shafted again
nemoFL Champion Author Florida Posts:4,060 Points:664,180 Joined:Oct 2008	Message Posted: Jul 30, 2010 8:08:03 PM Ignore nemoFL Report Abuse fair enough
Cheney Champion Author Toronto Posts:1,080 Points:1,728,840 Joined:May 2004	Message Posted: Jul 30, 2010 8:05:50 PM Ignore Cheney Report Abuse normal practice.
jay4 Champion Author Colorado Springs Posts:5,792 Points:1,326,080 Joined:Apr 2006	Message Posted: Jul 30, 2010 8:05:01 PM Ignore jay4 Report Abuse Another yesterday's story repeated. Not surprised, what with all the special tax treatments Congress has granted Big Oil such as oil depletion allowances, etc. The ignorant below will be those blaming Obama, who had nothing to do with these laws almost a century old.