- 31 -
additional royalty, and that the purpose of the Special Tax was
to impose taxes on excess and unexpected profits, not to impose
additional charges on oil companies for rights to extract oil,
and therefore that the Special Tax constituted a tax, not a levy
in exchange for specific economic benefits. In Phillips
Petroleum Co. v. Commissioner, supra at 295, we explained:
The word “tax” in [the U.S.] * * * is generally
understood to mean an involuntary charge imposed by
legislative authority for public purposes. It is
exclusively of statutory origin. Tax burdens and
contractual liabilities are very different things. A
tax is compulsory, an exaction of sovereignty rather
than something derived by agreement. A tax is a
revenue-raising levy imposed by a governmental unit.
It is a required contribution to the governmental
revenue without option to pay. A royalty refers to a
share of the product or profit reserved by an owner for
permitting another to use a property. [Citations
omitted.]
In Phillips Petroleum Co., we then concluded that the
Norwegian Special Tax was enacted:
to take advantage of a new profit situation created by
surging oil prices, and to receive a larger share of what
Norway saw as extraordinarily high and unforeseen profits
generated from Norwegian resources, and at the same time to
allow petroleum companies to earn a reasonable profit. [Id.
at 292.]
Phillips Petroleum Co. v. Commissioner, supra, supports our
finding and conclusion herein that PRT is not to be regarded as
payment in exchange for specific economic benefits Exxon received
under its North Sea licenses.
Page: Previous 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 NextLast modified: May 25, 2011