Sponsor
Jon Husted
Senator · R-OH
Senator · R-OH
The bill provides a targeted 22% depletion tax break to rare-earth property owners to spur domestic extraction and investment, at the cost of reduced federal revenue and preferential tax treatment for a narrow set of taxpayers.
Owners/operators of qualifying rare-earth mining properties can claim a 22% percentage depletion deduction, directly reducing their taxable income and lowering their federal tax liability.
Expanding the list of eligible deposits may encourage investment and development in domestic rare-earth extraction, potentially creating jobs and economic activity in mining communities.
Expanding the depletion allowance will reduce federal tax revenues, potentially increasing the deficit or requiring cuts or offsets to other federal programs and services, which affects all taxpayers.
The provision creates a targeted tax benefit for specific mineral deposits, producing unequal tax treatment and perceived unfairness relative to other industries and taxpayers.
Based on analysis of 4 sections of legislative text.
Expands which rare earth mineral deposits qualify for the 22% percentage depletion tax allowance, lowering tax liability for qualifying producers.
Official title: Amend the Internal Revenue Code of 1986 to adjust the percentage depletion rate for certain rare earths, and for other purposes.
Introduced March 10, 2026 by Jon Husted · Last progress March 10, 2026
Changes to the tax code expand which rare earth mineral deposits qualify for the 22% percentage depletion allowance. The amendment inserts new language into the existing list of deposits eligible for that depletion rate, effective for taxable years beginning after enactment, which increases tax benefits for qualifying mining operations producing certain rare earths.