As quickly as the idea was proposed, the prospect of $ 100 gas-rebate checks for taxpayers was taken off the Senate table.
Senate Majority Leader Bill Frist, R-Tenn., withdrew a proposed tax change on oil company inventory accounting after hearing criticism from President Bush and industry leaders. The measure would have covered the bulk of the cost of such a tax benefit.
Frist said that the Senate Finance Committee would hold hearings on the plan later this year to examine the pros and cons of the change, which had been a last-minute addition to the Republican leadership's energy package last week.
Many manufacturers, wholesalers and retailers that rely on large inventories were also concerned about the specific proposal in a separate tax bill to bar the accounting practice known as last-in, first-out. The practice allows companies to record sales from inventory at the higher cost of acquiring or producing goods, rather than a potentially lower original price.The energy package still includes protections against price gouging, incentives to expand domestic oil refinery capacity, support for new energy initiatives and tax incentives for buying hybrid vehicles.
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