Protecting America’s Small Oil and Gas Producers and Rural Jobs Act

This bill changes federal tax rules that let small oil and gas producers deduct a percentage of income from their wells, called percentage depletion. For marginal (low-output) wells, the deduction rate would be 15 percent plus 1 percentage point for each whole dollar the prior year's crude oil reference price falls below $70, up to 25 percent. The $70 amount would be adjusted after 2027 using a Producer Price Index for drilling oil and gas wells. The bill would remove taxable income limits on the deduction for marginal wells and raise the daily oil quantity eligible for the deduction from 1,000 to 2,000 barrels. The changes would apply to taxable years beginning after December 31, 2026.

Full text and official record on Congress.gov

Sponsors

• Tracey Mann Republican sponsor
• 12 cosponsors