Recently reported data showing some US-headquartered oil and gas companies regularly paid less in taxes to the US than to foreign governments could become a focus in an upcoming debate in the US Congress over federal tax policy.
ExxonMobil reported paying nearly $1.2bn in taxes to the US in 2023, a fraction of the $5.6bn in taxes it paid to the UAE the same year, according to a first-time "Form SD" report it filed with the US Securities and Exchange Commission (SEC) last month. In its own report, Chevron disclosed it paid nearly $1.2bn in taxes to the US last year, compared with $4bn to Australia. US independent Hess paid $190,000 in taxes to the US last year and $50mn in taxes to Malaysia.
Oil industry officials say the data on tax payments — disclosed ahead of a 30 September deadline the SEC set as part of a long-delayed provision from the 2010 Dodd-Frank Act — does not provide a comprehensive view of industry's tax obligations, which can vary among countries depending on the tax code and their operations. The payment disclosures also do not cover payroll taxes or state and local taxes, for example, and do not say if a company had carryover net operating losses or tax credits that reduced its overall tax bill in the US.
"It would be very inaccurate to reach a conclusion that only takes a little bit of information, and try to extrapolate from that the big picture," an oil industry official said.
But tax watchdogs say the disclosures should give Congress further cause to revisit the federal tax code, to understand why some profitable oil companies headquartered in the US are able to pay far less in taxes to the US than to foreign governments, or in some years pay no taxes to the US. US independent Apache parent APA reported paying no income taxes to the US in 2023 on a net income of $2.3bn, according to its filing. APA said "tax net operating losses" last year reduced its tax bill to zero.
"Having this information publicly available puts a spotlight on an industry that so far has escaped that attention," nonprofit group Financial Accountability and Corporate Transparency Coalition's policy director Zorka Milin said. "It does put them on a back foot. I think that's obvious, and they need to get used to that."
The tax disclosures, which only cover publicly listed companies, show some US oil companies with international operations paid nearly all of their government taxes to the US. US independent EOG Resources paid $1.1bn in taxes to the US last year and $9mn to Trinidad. US independent Devon Energy's $350mn in reported tax payments last year went entirely to the US, according to its filing. Devon has operations in Canada but no reported tax payments.
ExxonMobil, in a filing with the SEC alongside its disclosure report, said the data in Form SD had a narrow focus, whereas its "total expense for taxes and duties" in the US was more than $10bn, which includes tax obligations from its acquisition of Pioneer Natural Resources. Chevron, which reported US tax expenses of $1.8bn in the US last year in separate securities filings, said it complies with "all legal and contractual requirements" where it operates. Hess said that except for a subsidiary that paid the reported $190,000 in taxes, all other subsidies were in a taxable loss position last year.
The release of the tax data comes as Congress heads to a "tax cliff" from the expiration at the end of 2025 of an estimated $4 trillion in tax cuts that were made temporary, under former president Donald Trump's Tax Cuts and Jobs Act (TCJA) in 2017. To extend those tax cuts, Congress will be looking for revenue-raisers, such as increasing corporate taxes or cutting spending. Democratic presidential candidate Kamala Harris says the US will "have to raise corporate tax rates" to offset the costs of her policies. Republican presidential candidate Donald Trump has pledged to cut corporate tax rates to as low as 15pc, from 21pc currently, alongside various other tax cuts that are likely to cost trillions of dollars.
Consumer groups say the disparity in the "tax take" in the US compared with other countries is noteworthy, because it suggests that oil companies could remain profitable in the US even if taxes were higher. Oil industry officials, meanwhile, say they want Congress to cut tax further than the 21pc corporate tax rate enacted in 2017 through the TCJA.
"We supported TCJA because it lowered corporate tax rates," American Petroleum Institute president Mike Sommers said on 26 September during an event on Capitol Hill. "It's still in a competitive place, but it should be lowered even more."
