Expensing of Exploration and Development for Non-fuel Minerals


Energy - Alternative

Subsidy Type

Tax Expenditure

Committees of Jurisdiction

House Committee on Ways and Means, Senate Finance Committee

$100 FY 23 Budget Score (in mil.)
$1,000 FY 23-32 Budget Score (in mil.)

Expensing of costs associated with exploration and development refers to the ability of some extractive industries to deduct prospecting costs fully from their taxable income immediately or as they are incurred rather than waiting for those activities to generate income. This is an exception to general tax rules, which normally require companies to capitalize these costs (i.e. depletion or depreciation) over the life of the asset. Noncorporate mineral producers may fully expense their costs, while corporate mineral producers may expense 70 percent of their costs and deduct the remaining 30 percent over 60 months.

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