S. 224Senate119th Congress (2025-2027)In Committee

Promoting Domestic Energy Production Act

AI-Generated Summary

Updated November 24, 2025 at 3:22 AM UTC

The Promoting Domestic Energy Production Act changes the tax code to let oil and gas producers treat intangible drilling and development costs differently when they calculate adjusted financial‑statement income. By limiting how depreciation and other expense deductions are counted, the bill aims to give energy companies a more favorable tax basis for these costs. The new rules take effect for tax years starting after the end of 2025.

Key Provisions

Amends Section 56A(c)(13) of the Internal Revenue Code so that, when calculating adjusted financial‑statement income, depreciation deductions (under §167) and other expense deductions (under §263(c)) are subtracted only to the extent they are allowed for taxable‑income purposes.
Adds language that requires taxpayers to ignore any depreciation or depletion expense reported on their financial statements that relates to intangible drilling and development costs when computing the adjusted financial‑statement income.
Specifies that these changes apply to taxable years beginning after December 31, 2025.

Legislative Activity

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1 earlier action

SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

Finance Committee

January 23, 2025

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SenateIntro Referral

Introduced in Senate

January 23, 2025

SenateIntro Referral

Read twice and referred to the Committee on Finance.

Finance Committee

January 23, 2025

Bill Text

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Introduced in SenateIssued January 23, 2025

119th CONGRESS

1st Session

S. 224

IN THE SENATE OF THE UNITED STATES

January 23, 2025

Mr. Lankford (for himself, Mr. Barrasso, Mr. Daines, Mr. Cassidy, Mr. Scott of South Carolina, Mr. Marshall, Mr. Mullin, Mr. Cruz, Mr. Cramer, Ms. Lummis, Mr. Moran, Mr. Sheehy, Mr. Risch, and Mr. Sullivan) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to allow intangible drilling and development costs to be taken into account when computing adjusted financial statement income.

Short title

This Act may be cited as the Promoting Domestic Energy Production Act.

Intangible drilling and development costs taken into account for purposes of computing adjusted financial statement income

(a)

In general

Section 56A(c)(13) of the Internal Revenue Code of 1986 is amended—

(1)

by striking subparagraph (A) and inserting the following:

(A)

reduced by—

(i)

depreciation deductions allowed under section 167 with respect to property to which section 168 applies to the extent of the amount allowed as deductions in computing taxable income for the year, and

(ii)

any deduction allowed for expenses under section 263(c) with respect to property described therein to the extent of the amount allowed as deductions in computing taxable income for the year, and

, and

(2)

by striking subparagraph (B)(i) and inserting the following:

(i)

to disregard any amount of—

(I)

depreciation expense that is taken into account on the taxpayer's applicable financial statement with respect to such property, and

(II)

depletion expense that is taken into account on the taxpayer’s applicable financial statement with respect to the intangible drilling and development costs of such property, and

(b)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2025.