BP Claiming $9.9 Billion Tax Refund To Cover Gulf Oil Spill Costs

WSJ:

So, the clean-up of BP's Gulf oil spill may cost U.S. taxpayers after all.

President Obama has insisted BP would bear the entire cost of cleaning up the spill and making the injured business and wildlife whole again. And yet BP said today it plans to claim $9.9 billion in U.S. tax credits based on the $32.2 billion charge it reported related to costs for the Gulf oil spill. That means that $9.9 billion that might have been going into the federal government's general fund will be used to cut BP's spill costs by a third.

Read the whole story: WSJ

Comments

[Jim Shaffer]

05:27 AM on 07/30/2010

Is there no limit to the patient tolerance of the american taxpayer? Never have I seen a nation take such abuse from a private company. Obama should have handed out vaseline with his presidency, there's a petroleum product were all going to need by the time BP finishes with us. What with the long legal battles to get those supposed compensations and this, I'm sure BP will make it through this crisis just fine. However, if you allow private companies to do this to your country why bother having a government? It's just a matter of time before another big company does the same. How long before they have enough power to enslave us all?
The Corporate Oligarchy has you!

[BrownBeretsNewMexico]

06:01 PM on 07/29/2010

We are living in such morally bankrupt, corrupt, wasteful times! We should be outraged, and take a stand!!!!!

[politicalguy94]

01:36 AM on 07/29/2010

Everybody should email the White House and Congress about this! Tell them to get rid of the horrible provisions that are allowing BP's refund to happen!

[Jim Shaffer]

05:35 AM on 07/30/2010

After all this you still believe in the system!?!? Don't worrry, I'm sure Santa will tell the tooth fairy, to get the easter bunny and they'll save us from BP's greed. Now go back to sleep.

[politicalguy94]

01:17 AM on 07/31/2010

I know the system is broken, but I believe that there are representatives and senators in Congress that can be pressured by the people into doing the right things, and if those representatives/senators end up doing so, they can improve their standing with voters and increase their chances of getting reelected. I know some may scoff at me for making these comments, but no matter how much any Congressman tries to go against the wishes of his constitutents, in the end he can only be reelected if he has a good standing with them.
If the people in Congress realize that they cannot support special interest groups (corporations, etc.) AND have the support of their constitutents, they are more likely to start listening to the people and not the special interest groups.

[RightsGuy]

12:44 AM on 07/29/2010

Get your free PROSECUTE BP bumper sticker here:

http://stickerobot.com/bp/

You can also download and print your own. Hang them up everywhere!

[Paul Russell]

05:42 PM on 07/28/2010

We are glad to see BP get help when it is needed. GO BP!

- Republicans

[tompoe]

10:05 AM on 07/29/2010

Oh, and don't forget most of their marketing costs can be written off as well, say a few hundred million?

[Jim Shaffer]

05:39 AM on 07/30/2010

Your government and it's 2 party system is irrelevant.
The Corporate Oligarchy has you.

[jasmadol]

01:27 PM on 07/28/2010

American business owners receive tax credits every year if their company operates at a loss. Some smaller businesses, receive them to the point of not paying any taxes at all.

I’m not trying to defend BP in any way, in my honest opinion, due to the egregious number of safety violations and warnings; they should lose any license to operate within the United States at all.

The estimated cost of the clean up is $32.2 billion dollars. BP has already placed $20 billion dollars in escrow to cover the losses of business owners, not to mention that BP isn’t the only company that should be shouldering the burden. The oil well is owned by two other companies that are shirking their responsibility to cover the cost of the clean up.

Should BP be able to claim a $9.9 billion dollar tax credit to offset 1/3 of the cost of the Deepwater Horizon disaster clean up? Is this $9.9 billion dollars coming out of my pocket? Or is BP getting its own money back for taxes already paid? When and how much is BP going to be fined?

I’ll hold off judgment on this one until the oil leak is completely contained, all the oil is cleaned up, the businesses in that area are fully compensated for their losses and I can have a shrimp cocktail that doesn’t cost me a week’s salary.

[tompoe]

10:07 AM on 07/29/2010

Actually, no one seems to be able to locate that escrow account.

[Jim Shaffer]

05:43 AM on 07/30/2010

Judging by the way things are going you'll hold off judgement till 2028!

http://www.huffingtonpost.com/2010/07/27/bp-oil-spill-legal-mess-l_n_660382.html

BTW- How much does BP pay you to post.

[pauldeba]

12:34 PM on 07/28/2010

My guess is BP will be fined the exact amount of this so called "tax break". Fines are not tax deductible. No one ever complains when the government gets additional tax revenue in a windfall scenario. No one complained about all the additional property tax localities collected during the Real Estate bubble. Only when they have to take their own medicine does it become a Casblanca-like "I'm shocked, shocked to find out that expenses will be deducted on tax returns"

[Ann Shahan]

12:54 PM on 07/28/2010

Interesting thought. If I'm reading you correctly, you're saying whatever the cost of the spill to BP, they will be fined in an equal amount.

[cgeorgan]

11:18 AM on 07/28/2010

Looks like BP is taking a page from Sen. John Kerry's "sound tax advice" by adhering to current IRS regulations.

Once again, the law of unintended consequences. Nothing more laws (with more unforeseen consequences) can't fix.

[BannedNBoston]

10:22 AM on 07/28/2010

Non of it wasted on Haz Mat suits or respirators
Just corexit

Censored Gulf health news: Call it what it is: Genocide. Crime Against Humanity (videos)
http://www.examiner.com/x-10438-Human-Rights-Examiner~y2010m7d27-BP-EPA-Sept-11-Deja-View-Video

[Bumpkins]

10:12 AM on 07/28/2010

No surprise that BP is attempting to wiggle out. A good reminder that you just do not ask a corporation to cooperate...they will not. Anticipate the court cases go for years, and BP will try to push the "spill" onto everyone else involved with the drilling. Speculate----We-BP- did not actually do the drilling, so we are not responsible. It was the Govt. agency fault-they did not do their job, and let the drilling go on - knowing there were problems - act of God , no one could have anticipated what happened. It appears that when regulations are loosened the fox runs wild in the hen house.

[AbeMartin]

09:26 AM on 07/28/2010

Gee. There's a shock. The taxpayer getting billed again so the Bush/Cheney/Vitter/Cornyn/Hutchinson/Barton protected Houston Oil Corridor cabal can make its billions as it ruins the Gulf and the way of life of millions of working saps. I bet the Booker's Single Barrel Bourbon flowed like water at the Petroleum Clubs in Baton Rouge and Houston when this was disclosed.

[Highfin]

08:52 AM on 07/28/2010

Typical of the beancounters. Negligence and incompetence as well as systemic management failures were condoned by BP, causing the greatest environmental catastrophe in US history. Then BP claims a tax credit of $9.9 billion, on a quarterly charge of $32.2 billion. The IRS needs to take a close look at what the BP beancounters have rolled into that $32.2 billion. BP will only transfer $7 billion to the cleanup fund of $20 billion this year, but gets to claim the full tax credit. Very astute accounting and perfectly legal.

What will the EPA fine be for an estimated (100,000 barrels x 90 days) 9,000,000 barrels of oil spilled into the Gulf of Mexico?

The US government really needs to keep BP's corporate malfeasance as well as the actions of the other pricipals in focus. They spilled it, they own it and they should be held fully accountable to bear all costs to clean up the spill and pay fair compensation to those who were impacted by it, both short and long term.

When will the Obama administration convene an independent comission to investigate the sequence of events leading up to the explosion and sinking of the Deepwater Horizon and the subsequent oil spill. The responsibility and culpability of BP, Transocean, Halliburton et. al. needs to be fully determined and civl and/or criminal charges, as appropriate, should be pursued. The Gulf Oil Spill will be legal fodder for the next 20 - 30 years.

[pauldeba]

09:00 AM on 07/28/2010

"BP will only transfer $7 billion to the cleanup fund of $20 billion this year, but gets to claim the full tax credit. Very astute accounting and perfectly legal."

That's not true for taxes. Accruals must be paid within 90 days of year end in cash to be deductible. Otherwise, they are deducted in the year of payment. BP will not be deducting more than they transfer, but that won't stop people from spining it to make it more of a story.

[plan-uts]

10:42 AM on 07/28/2010

The full write down takes place on BP's Financial Statements Only. It has to to reflect the true financial condition of the company. Pauldeba explains the write down timing for tax purposes. These type stories intentionally do not give the full story. Grab the headline.

[MyResponsibility]

11:48 AM on 07/28/2010

True. Same reasons why corporations had to take hits on their taxes this year as a result of the new healthcare "reform." All legitimate (remember Stupak Waxman quickly backing away from their demand of John Deere, Caterpillar, AT&T, and Verizon to prove their losses as a result of the "reform"?).

This is a non-story, with a deceptive headline. Total BS.

[oldwhitewomantoo]

08:50 AM on 07/28/2010

I feel sick.

The value of my home has gone down a minimum of 30% in the last four years. No one is compensating my family for that real loss. And we pay our bills and did nothing wrong.

Why should we compensate BP for their misfeasance?

[Bumpkins]

10:13 AM on 07/28/2010

BP has the bucks to spread around in Washington.

[MyResponsibility]

12:25 PM on 07/28/2010

Why do you call it a real loss? Owing more than it's worth is not a real loss until you sell it. And if you did sell it at a loss (short-sale) if the bank owned the note, the bank took the loss (not you), and they'd write it off, just like BP will do. Your only loss in such a case is the amount you put at risk - the down payment (that WOULD suck, no doubt). While you cannot write off a loss on your personal residence, you don't have to pay capital gain tax on the sale of your home when you make money (up to $250,000). If you own the house as a RE investment and sell it at a loss, you can write that off to reduce your income. There is equality here.

[OMG1]

08:34 AM on 07/28/2010

If they can keep that war in Afghanistan going, they should be back on their feet real soon.

[Gregory Rampinelli]

07:41 AM on 07/28/2010

The article is misleading. BP has a loss due to the oil spill. That reduces its taxable income, which reduces its tax. That's what an income tax is all about - if you have income, you pay a percentage of it to the government, and if you don't have income, you don't.

[hoho5973]

08:19 AM on 07/28/2010

Yeah, the spin on this is quite interesting. I don't think the oil spill is helping BP's profits any, so of course they are going to pay less taxes.

[1differentdrummer]

08:22 AM on 07/28/2010

Yeah, that darned WSJ.