Geothermal Tax Parity Act
Summary
The Geothermal Tax Parity Act aims to amend the Internal Revenue Code of 1986 to include geothermal deposits alongside oil and gas in sections concerning amortization of geological and geophysical expenditures and passive loss limitations. This would allow for similar tax treatment for geothermal energy exploration and development as currently provided for oil and gas. The bill seeks to incentivize investment in geothermal energy by providing tax benefits.
Expected Effects
The Act would likely lead to increased investment in geothermal energy exploration and development due to the offered tax incentives. This could result in more geothermal energy projects being initiated. It would also equalize the tax treatment of geothermal energy with that of oil and gas.
Potential Benefits
- Increased investment in geothermal energy.
- Potential for more geothermal energy projects.
- Equal tax treatment for geothermal energy compared to oil and gas.
- Could lead to greater energy independence.
- May contribute to a reduction in carbon emissions.
Potential Disadvantages
- Potential for increased complexity in tax code.
- Possible unintended consequences related to tax incentives.
- May not significantly impact overall energy production.
- Could shift investment away from other renewable energy sources.
- Potential for exploitation of the tax benefits without substantial geothermal development.
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution (Preamble) by promoting alternative energy sources. Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1). The bill falls under this power as it relates to taxation and promoting energy development.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).