Tax Policy: Investment Tax Credit for Offshore Drilling Rigs Needs Clarification

摘要

As you know, the Congress is currently considering possible repeal of the investment tax credit in the context of general tax reform. If repeal of the credit does not occur, the Congress should consider clarifying the circumstances under which the credit is to be allowed for offshore drilling rigs used in foreign waters. The report presents (1) information on the history of the investment tax credit and the applicable exceptions for offshore drilling rigs, (2) IRS' basis for allowing the credit for such rigs, and (3) estimates of the dollar amounts of credit that have been available for offshore drilling rigs placed in service after 1975 and used outside the designated portion of the Western Hemisphere.