This is the most recent federal government report that focuses on financial interventions and subsidies that meet the following criteria ... 1) they are provided by the federal government, 2) they provide a financial benefit with an identifiable federal budget impact, and 3) they are specifically targeted at energy.
These criteria, particularly the energy-specific requirement, exclude some subsidies that benefit the energy sector. For example, Section 199 of the American Jobs Creation Act of 2004, referred to as the domestic manufacturing deduction, provides reductions in taxable income for American manufacturers, including domestic oil and gas producers and refiners. Taxpayers generally are permitted a 9% deduction for domestic production activities. The deduction is reduced to 6% for qualified production activities income attributable to the production refining, processing, transportation, or distribution of oil, gas, or any primary product thereof. The Section 199 manufacturing credit applies to oil and gas producers along with a variety of other U.S. manufacturers.
While domestic oil and natural gas companies utilized this provision to reduce their tax liability, other industries, including traditional manufacturing sectors and other activities such as engineering and architectural services, sound recordings, and qualified film production, also took advantage of it.
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