Promoting Domestic Energy Production Act
Key claim: The bill would let corporations subtract intangible drilling and development costs and related depletion expenses for domestic oil, gas, or geothermal wells from adjusted financial statement income when computing the 15% corporate alternative minimum tax.
Abstract
(HR662 · 119th Congress) Promoting Domestic Energy Production Act This bill allows corporations to reduce their adjusted financial statement income to account for certain intangible costs related to oil, gas, or geothermal well drilling and development for purposes of calculating the corporate alternative minimum tax. Under current law, a 15% corporate alternative minimum tax is imposed on a corporation with adjusted financial statement income exceeding an average of $1 billion for a consecutive three-year period (or an average of $100 million for a U.S. corporation that is part of a foreign parent multinational group if the adjusted financial statement income of such group exceeds an average of $1 billion for a consecutive three-year period). Adjusted financial statement income generally is the net income or loss reported on the corporation’s applicable financial statement for a tax year, with adjustments for specific items. This bill expands the reductions that may be made to a corporation’s adjusted financial statement income to include (1) intangible drilling and development costs incurred by an operator of a domestic oil, gas, or geothermal well that are allowed as a deduction in the current tax year when computing regular taxable income; and (2) any depletion expenses related to the intangible oil, gas, or geothermal well drilling and development costs. Latest action (2025-01-23): Referred to the House Committee on Ways and Means.
Why this matters
The 15% corporate alternative minimum tax enacted in 2022 is calculated off book (financial statement) income, which does not automatically reflect the tax code’s longstanding expensing of intangible drilling costs and percentage depletion. By carving IDC and depletion out of AFSI, the bill would shift CAMT burden away from large domestic oil, gas, and geothermal producers, aligning the AMT base with regular-tax treatment of these energy-sector costs.