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Elimination of the Mineral Depletion Allowance Position
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The tax reform discussions drafts that have been released in the House and Senate would both repeal the percentage depletion deduction.  The Industrial Minerals Association – North America (IMA-NA) strongly encourages Congress to reject these unwarranted proposals that would significantly harm the competitiveness of American resources producers.  U.S. mineral, coal, aggregates, natural stone, and independent oil and gas producers play an integral role in sustaining American economic prosperity and energy security.  The percentage depletion deduction is vitally important to these U.S. natural resources operations and must be retained. 

According to the United States Geological Survey (USGS), the total estimated value of U.S. production of industrial minerals or non-fuel minerals, in 2012 was $41.6 billion, and the industry employed over 100,000 men and women.  Industrial minerals are a vital part of our everyday lives.  These minerals, such as limestone, silica, soda ash, talc, kaolin, calcium carbonate, and other minerals are used extensively in various manufacturing processes.  In an average working day you likely will come into contact with at least 100 items that have been manufactured from industrial minerals.  Glass, paint, ceramic tiles and plates, wood flooring, drinking water, wines/beers, salt, sugar, detergents, cement and concrete, and even cat litter are all manufactured using industrial minerals.

Any tax reform effort should increase the competitiveness of domestic industries, create jobs, and spur economic growth.  We do not believe the discussion drafts meet these goals for the American resources industries.  The thousands of resource producers in the U.S. all have in common that their businesses are extremely capital intensive.  Repealing the percentage depletion deduction would raise the cost of capital for U.S. resources industries, making their products less competitive globally, and directly putting hundreds of thousands of high-wage jobs at risk throughout the U.S. economy.  Repeal of the percentage depletion deduction would impact future exploration and development of mineral operations, which would in turn increase the United States’ reliance on foreign producers throughout our economy.  

The Industrial Minerals Association – North America stands ready to participate constructively in this discussion as Congress proceeds forward with tax reform.