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HR 2224

Tar Sands Tax Loophole Elimination Act

119th Congress Introduced by Yassamin Ansari and 7 co-sponsors

HR 2224 treats tar sands-derived products as crude oil for federal excise tax and grants Treasury authority to reclassify other fuels to crude oil, closing loopholes.

Introduced in House
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WeVote Research Nonpartisan
Bill Summary · HR 2224

Summary of HR 2224 – Tar Sands Tax Loophole Elimination Act

Overview

  • Bill number: H.R. 2224
  • Title: Tar Sands Tax Loophole Elimination Act
  • Purpose: Amend the Internal Revenue Code to clarify that products derived from tar sands are crude oil for purposes of the federal excise tax on petroleum, and grant additional regulatory authority to classify other crude oil and petroleum products for tax purposes.
  • Status: Introduced in the House; referred to the Committee on Ways and Means.
  • Introduced: March 18, 2025
  • Primary sponsor: Janice D. Schakowsky
  • Cosponsors: Yassmin Ansari, Nanette Diaz Barragán, Eleanor Holmes Norton, Jill N. Tokuda, Alexandria Ocasio-Cortez, Steve Cohen, Rashida Tlaib (with additional cosponsors listed)

Key Provisions

  1. Clarification of tar sands as crude oil for taxation

    • Rewrites the definition of “crude oil” in IRC section 4612(a)(1) to explicitly include:
      • crude oil condensates
      • natural gasoline
      • bitumen or bituminous mixtures
      • oil derived from bitumen or bituminous mixtures (including oil derived from tar sands)
      • oil derived from kerogen-bearing sources (including oil shale)
    • Effect: Products derived from tar sands would be treated the same as other crude oil for purposes of the federal excise tax on petroleum.

  2. Regulatory authority to address additional crude oil and petroleum products

    • Adds a new subsection allowing the Secretary to prescribe that certain fuel feedstocks or finished fuel products—typically transported by pipeline, vessel, railcar, or tanker truck—can be classified as crude oil or as a taxable petroleum product if:
      • The classification aligns with the Oil Pollution Act of 1990’s definition of oil, and
      • The fuel feedstock or finished product is produced in sufficient commercial quantities to pose a significant discharge risk.
    • Purpose: Enables Treasury/IRS to address other potential tax loopholes or classification gaps beyond tar sands.

  3. Technical amendment

    • Amend IRC section 4612(a)(2) by removing the phrase “from a well located,” making the definition more inclusive of non-well sources.

  4. Effective date

    • The amendments take effect on the date of enactment (i.e., immediately upon the bill’s enactment).

Who/What Would Be Affected

  • Tax treatment of tar sands products: Producers and marketers of tar sands-derived oil would fall under the same federal excise tax framework as other crude oils.
  • Regulatory scope: Agencies (primarily the Secretary of the Treasury/IRS) would gain broader discretion to reclassify additional fuels as crude oil or taxable petroleum products, subject to policy criteria outlined in the bill.
  • Industry implications: Potential changes in tax liability, compliance requirements, and reporting for tar sands producers, refiners, and suppliers of fuel feedstocks and finished fuels.

Procedural and Timeline Details

  • Committee action: Referred to the House Committee on Ways and Means.
  • Related/c companion bills: HR 383 (companion), S 1026 (companion), HR 5983 (companion).
  • Next steps: If advanced, the bill would move through committee markups, potential floor votes, and, if passed by both chambers, be sent to the President for signature.

Summary

HR 2224 seeks to close a tax classification gap by explicitly including tar sands-derived products within the definition of crude oil for federal excise tax purposes, while also granting flexible regulatory authority to address other similar tax classification issues in the future. It would take effect upon enactment and could influence tax liabilities and compliance for tar sands activities and other fuel feedstocks and products that could be reclassified under the Oil Pollution Act criteria.

Compiled from official sources — confirm details with the bill’s official record.

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