Bill > S224

This bill amends the Internal Revenue Code of 1986 to modify how intangible drilling and development costs (IDDs) are treated when calculating a company's adjusted financial statement income. Specifically, the bill allows companies to reduce their adjusted financial statement income by deducting depreciation and expenses related to drilling and development property, aligning the tax treatment more closely with how these costs are reported in financial statements. Intangible drilling and development costs typically include expenses like labor, surveying, ground clearing, and other costs incurred in preparing for oil and gas drilling that are not part of the physical equipment. The bill would take effect for taxable years beginning after December 31, 2025, giving companies time to prepare for the new accounting method. By allowing these deductions, the bill aims to provide tax relief and potentially incentivize domestic energy production by making it more financially advantageous for companies to invest in oil and gas exploration and development.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/224/all-info