Sponsors
The bill lowers taxes for rare‑earth producers to incentivize more domestic production and strengthen supply chains, while reducing federal revenue and giving a targeted tax advantage to mining firms.
Rare-earth mining companies: would pay less in federal income tax because they could deduct 22% of gross income from ore production, lowering their taxable income and reducing tax bills.
U.S. producers and downstream manufacturers: higher after-tax returns could encourage more domestic rare-earth production, potentially strengthening supply chains for electronics and clean-energy technologies and supporting related jobs.
Federal budget and taxpayers: lower tax payments by rare-earth producers would reduce federal revenues, potentially increasing deficits or forcing spending cuts or tax increases elsewhere unless offsets are provided.
Other businesses and taxpayers: the tax break disproportionately benefits mining firms (including larger companies), creating an uneven tax treatment that may disadvantage competing industries and ordinary taxpayers who receive no similar benefit.
Based on analysis of 4 sections of legislative text.
Adds a 22% percentage depletion allowance for certain rare earth minerals, reducing taxable income for qualifying producers for taxable years after enactment.
Introduced March 10, 2026 by Jon Husted · Last progress March 10, 2026
Creates a 22% percentage depletion allowance for certain rare earth minerals in the Internal Revenue Code, allowing producers to deduct 22% of gross income from those mineral properties when computing taxable income. The change is effective for taxable years beginning after the date of enactment and is intended to lower tax bills for rare-earth producers and encourage domestic production.