The Critical Minerals Investment Tax Modernization Act of 2026 modifies the federal tax code to increase the percentage depletion allowance for companies mining rare earth elements and scandium. Currently, mining companies can deduct a percentage of their income as a tax break to account for resource depletion; this bill raises that deduction rate to 22 percent specifically for rare earth minerals (the 15 lanthanide elements) and scandium, putting them on the same tax treatment as tantalum and other critical minerals. The change affects domestic mining companies that extract these materials, which are crucial for electronics, renewable energy, and defense applications. The tax benefit takes effect immediately for taxable years beginning after the bill's enactment, with no specific funding amount mentioned since this is a tax deduction rather than a spending program. The bill aims to incentivize domestic production of critical minerals by improving the financial returns for companies engaged in their extraction.
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