Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Senator demands probe of BP tax break

By Annalyn Censky, staff reporter

NEW YORK (CNNMoney.com) -- Two days after BP said it will write off the cost of the oil spill cleanup against its income taxes, a U.S. senator is calling for a Congressional probe into the company's tax plans.

Sen. Bill Nelson, D-Fla. sent a letter to the Senate Finance Committee Thursday, requesting a series of hearings on the matter and calling BP's plans to take a tax write-off "unacceptable."

On Tuesday, BP said it took a $32 billion charge in the second quarter for clean-up costs, resulting in tax savings of about $10 billion.

That's half the value of the $20 billion fund that BP set up to aid Gulf coast victims, Nelson pointed out.

BP announced the charge along with its second quarter earnings, saying the cleanup costs were the main reason for its $17 billion loss during the quarter.

BP spokesman Daren Beaudo, in an email to CNN, said the company is following U.S. tax code in taking the charge.

"Taxes are paid on profits and the Gulf of Mexico spill response costs have reduced BP's US profits -- so it follows that our tax obligations will be lower as well," he said.

In admonishing the oil giant for its tax plans, Nelson also pointed out that Goldman Sachs (GS, Fortune 500) has said it will forgo any tax deduction for the $535 million it will pay in penalties in its settlement with the Securities and Exchange Commission. To top of page

Index Last Change % Change
Dow 16,827.93 51.50 0.31%
Nasdaq 4,750.55 -30.71 -0.64%
S&P 500 1,982.88 -4.17 -0.21%
Treasuries 2.04 -0.02 -0.78%
Data as of 2:49pm ET
Company Price Change % Change
Bank of America Corp... 15.70 0.01 0.06%
General Electric Co 27.37 0.55 2.05%
Freeport-McMoRan Inc... 11.75 0.57 5.10%
Micron Technology In... 18.16 0.59 3.36%
Apple Inc 111.64 0.86 0.78%
Data as of 2:34pm ET


Pepsi reported a $1.4 billion loss in its business in Venezuela during the company's third quarter. Its profits were down 73% from the same time a year ago. More

For years, Microsoft has said that its Surface tablets would replace traditional laptops, but Tuesday it announced its first ever laptop: the Surface Book. More

Smarties, a Halloween candy staple, have been around for 66 years. Three Millennial women are revolutionizing it. More