The oil spill liability tax expired on December 31, 2018. The Taxpayer Certainty and Disaster Tax Relief Act of 2019 enacted on December 20, 2019, as part of the Further Consolidated Appropriations Act of 2020, reinstated the oil spill liability tax for the period beginning on January 1, 2020, and ending on December 31, 2020. The oil spill liability tax imposes a tax of $0.09 per barrel on crude oil received at a United States refinery, and on petroleum products entered into the United States for consumption, use or warehousing.
Taxpayers are reminded to resume making semimonthly deposits of tax. A semimonthly period is the first 15 days of a calendar month or the portion of a calendar month following the 15th day of the month. The first deposit, covering the first 15 days of January, is due by January 29, 2020.
The deposit for each semimonthly period must not be less than 95 percent of the net tax liability incurred during the semimonthly period unless a safe harbor applies. Oil spill liability taxpayers may not use the safe harbor rules to calculate semimonthly deposits until the third calendar quarter of 2020 because the safe harbor rules require a second preceding calendar quarter (lookback quarter) in order to determine deposit amounts in the current quarter. The first calendar quarter of 2020 is the lookback quarter, for purposes of the safe harbor, for deposits due during the third calendar quarter.