26 U.S.C. § 613
Percentage depletion
In the case of the mines, wells, and other natural deposits listed in subsection (b), the allowance for depletion under section 611 shall be the percentage, specified in subsection (b), of the gross income from the property excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect of the property. Such allowance shall not exceed 50 percent (100 percent in the case of oil and gas properties) of the taxpayer’s taxable income from the property (computed without allowance for depletion and without any deduction under section 199A). For purposes of the preceding sentence, the allowable deductions taken into account with respect to expenses of mining in computing the taxable income from the property shall be decreased by an amount equal to so much of any gain which (1) is treated under section 1245 (relating to gain from disposition of certain depreciable property) as ordinary income, and (2) is properly allocable to the property. In no case shall the allowance for depletion under section 611 be less than it would be if computed without reference to this section.
Asbestos (if paragraph (1)(B) does not apply), brucite, coal, lignite, perlite, sodium chloride, and wollastonite.
Clay and shale used or sold for use in the manufacture of sewer pipe or brick, and clay, shale, and slate used or sold for use as sintered or burned lightweight aggregates.
The term “gross income from the property” means, in the case of a property other than an oil or gas well and other than a geothermal deposit, the gross income from mining.
The term “mining” includes not merely the extraction of the ores or minerals from the ground but also the treatment processes considered as mining described in paragraph (4) (and the treatment processes necessary or incidental thereto), and so much of the transportation of ores or minerals (whether or not by common carrier) from the point of extraction from the ground to the plants or mills in which such treatment processes are applied thereto as is not in excess of 50 miles unless the Secretary finds that the physical and other requirements are such that the ore or mineral must be transported a greater distance to such plants or mills.
The term “extraction of the ores or minerals from the ground” includes the extraction by mine owners or operators of ores or minerals from the waste or residue of prior mining. The preceding sentence shall not apply to any such extraction of the mineral or ore by a purchaser of such waste or residue or of the rights to extract ores or minerals therefrom.
Unless such processes are otherwise provided for in paragraph (4) (or are necessary or incidental to processes so provided for), the following treatment processes shall not be considered as “mining”: electrolytic deposition, roasting, calcining, thermal or electric smelting, refining, polishing, fine pulverization, blending with other materials, treatment effecting a chemical change, thermal action, and molding or shaping.
Except as provided in section 613A, in the case of any oil or gas well, the allowance for depletion shall be computed without reference to this section.
For purposes of paragraph (1), the term “geothermal deposit” means a geothermal reservoir consisting of natural heat which is stored in rocks or in an aqueous liquid or vapor (whether or not under pressure). Such a deposit shall in no case be treated as a gas well for purposes of this section or section 613A, and this section shall not apply to a geothermal deposit which is located outside the United States or its possessions.
In the case of any geothermal deposit, the term “gross income from the property” shall, for purposes of this section, not include any amount described in section 613A(d)(5).
2018—Subsec. (a). Pub. L. 115–141 substituted “any deduction under section 199A” for “the deduction under section 199A”.
2017—Subsec. (a). Pub. L. 115–97, § 13305(b)(4), struck out “and without the deduction under section 199” after “without allowance for depletion”.
Pub. L. 115–97, § 11011(d)(3), inserted “and without the deduction under section 199A” after “without the deduction under section 199”.
2005—Subsec. (c)(4)(H). Pub. L. 109–135 inserted “(including in situ retorting)” after “and retorting”.
2004—Subsec. (a). Pub. L. 108–357, which directed the insertion of “and without the deduction under section 199” after “without allowances for depletion”, was executed by making the insertion after “without allowance for depletion”, to reflect the probable intent of Congress.
1996—Subsec. (e)(1)(B). Pub. L. 104–188 substituted “subsection (b).” for “subsection (b),”.
1990—Subsec. (a). Pub. L. 101–508, § 11522(a), inserted “(100 percent in the case of oil and gas properties)” after “50 percent”.
Subsec. (e)(1)(B). Pub. L. 101–508, § 11815(b)(2), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “the applicable percentage (determined under the table contained in paragraph (2)) shall be deemed to be the percentage specified in subsection (b).”
Subsec. (e)(2) to (4). Pub. L. 101–508, § 11815(b)(1), redesignated pars. (3) and (4) as (2) and (3), respectively, and struck out former par. (2) which related to the applicable percentage depletion for geothermal deposits.
1986—Subsec. (e)(4). Pub. L. 99–514 added par. (4).
1978—Subsec. (c)(1). Pub. L. 95–618, § 403(a)(2)(A), inserted “and other than a geothermal deposit” after “oil or gas well”.
Subsec. (e). Pub. L. 95–618, § 403(a)(1), added subsec. (e).
1976—Subsec. (a). Pub. L. 94–455, § 1901(b)(3)(K), substituted “ordinary income” for “gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231”.
Subsec. (c)(2), (4)(I). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
1975—Subsec. (b)(1). Pub. L. 94–12, § 501(b)(2)(A), struck out subpar. (A) “oil and gas wells” and redesignated former subpars. (B) and (C) as (A) and (B), respectively.
Subsec. (b)(3), (4). Pub. L. 94–12, § 501(b)(2)(B), substituted “(1)(B)” for “(1)(C)” wherever appearing.
Subsec. (b)(7). Pub. L. 94–12, § 501(b)(2) (B), (C), substituted “(1)(B)” for “(1)(C)” in provisions preceding subpar. (A) and added subpar. (C).
Subsec. (d). Pub. L. 94–12, § 501(b)(1), substituted provisions denying the percentage depletion allowance in the case of oil and gas wells except as provided in section 613A for provisions governing the application of percentage depletion rates to certain taxable years ending in 1954.
1974—Subsec. (c)(4)(E). Pub. L. 93–499 inserted reference to decarbonation of trona.
1969—Subsec. (b). Pub. L. 91–172, § 501(a), reduced the percentage depletion rate on oil and gas wells from 27½ percent to 22 percent, reduced to 22 percent other minerals formerly receiving percentage depletion at a rate of 23 percent, added molybdenum in the category of minerals subject to the 22 percent depletion rate, reduced to 14 percent the rate on minerals formerly receiving depletion at a 15 percent rate except in the case of domestic gold, silver, oil shale, copper, and iron ore, and inserted provision that for percentage depletion purposes, minerals other than sodium chloride, extracted from brine pumped from a saline perennial lake within the United States are not to be considered minerals from an inexhaustible source.
Subsec. (c)(4)(H), (I). Pub. L. 91–172, § 502(a), added subpar. (H) and redesignated former subpar. (H) as (I).
1966—Subsec. (b)(2)(B). Pub. L. 89–809, § 207(a)(1), inserted “clay, laterite, and nephelite syenite” after “anorthosite”.
Subsec. (b)(3)(B). Pub. L. 89–809, §§ 207(a)(2), 209(a)(2), substituted “if neither paragraph (2)(B), (5), or (6)(B) applies” for “if paragraph (5)(B) does not apply”.
Subsec. (b)(5). Pub. L. 89–809, § 209(a)(1), added par. (5). Former par. (5) redesignated (6).
Subsec. (b)(6). Pub. L. 89–809, §§ 208(a)(1), 209(a)(1), (3), (4), redesignated par. (5) as (6), struck out “mollusk shells (including clam shells and oyster shells),”, substituted “shale (except shale described in paragraph (5)), and stone (except stone described in paragraph (7))” for “shale, and stone, except stone described in paragraph (6)” in subpar. (A), and struck out “building or paving brick,” and “sewer pipe,” in subpar. (B). Former par. (6) redesignated (7).
Subsec. (b)(7). Pub. L. 89–809, §§ 208(a)(2), 209(a)(1), (5), redesignated par. (6) as (7) and inserted “mollusk shells (including clam shells and oyster shells),” after “marble,” and “(other than slate to which paragraph (5) applies)” after “any other such mineral”.
Subsec. (c)(4)(G). Pub. L. 89–809, § 209(b), substituted “paragraph (5) or (6)(B)” for “paragraph (5)(B)”.
1964—Subsec. (b)(2)(B), (6). Pub. L. 88–571 inserted “beryllium” after “antimony” in par. (2)(B), and deleted “beryl” after “bauxite” in pars. (2)(B) and (6).
1962—Subsec. (a). Pub. L. 87–834 inserted provisions requiring the allowable deductions taken into account with respect to expenses of mining in computing the taxable income from the property to be decreased by an amount equal to so much of any gain which is treated under section 1245 as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231, and is properly allocable to the property.
1960—Subsec. (b)(3). Pub. L. 86–564, § 302(a)(1), limited the 15 percent allowance for ball clay, bentonite, china clay, and sagger clay to cases where paragraph (5)(B) does not apply, and authorized a 15 percent allowance, if paragraph (5)(B) does not apply, for clay used or sold for use for purposes dependent on its refractory properties.
Subsec. (b)(5). Pub. L. 86–564, § 302(a)(2), substituted provisions authorizing a 5 percent allowance for clay used, or sold for use, in the manufacture of building or paving brick, drainage and roofing tile, sewer pipe, flower pots, and kindred products for provisions which authorized a 5 percent allowance for brick and tile clay.
Subsec. (b)(6). Pub. L. 86–564, § 302(a)(3), struck out provisions which authorized a 15 percent allowance for refractory and fire clay. See subsec. (b)(3) of this section.
Subsec. (c)(2). Pub. L. 86–564, § 302(b)(1), substituted “the treatment processes considered as mining described in paragraph (4) (and the treatment processes necessary or incidental thereto)” for “the ordinary treatment processes normally applied by mine owners or operators in order to obtain the commercially marketable mineral product or products”, and “such treatment processes” for “the ordinary treatment processes”.
Subsec. (c)(4). Pub. L. 86–564, § 302(b)(2), substituted “The following treatment processes where applied by the mine owner or operator shall be considered as mining to the extent they are applied to the ore or mineral in respect of which he is entitled to a deduction for depletion under section 611” for “The term ‘ordinary treatment processes’ includes the following” in opening provisions, included cleaning in subpar. (B), substituted “ores or minerals which” for “minerals which” and included substantially equivalent processes in subpar. (C), included uranium and minerals which are not customarily sold in the form of the crude mineral product and substituted “from the ore or the mineral or minerals from other material from the mine or other natural deposit” for “from the ore, including the furnacing of quicksilver ores” in subpar. (D), included the furnacing of quicksilver ores in subpar. (E), and added subpars. (F) to (H).
Subsec. (c)(5). Pub. L. 86–564, § 302(b)(2), added par. (5).
1958—Subsec. (d). Pub. L. 85–866 added subsec. (d).
Amendment by Pub. L. 115–141 effective as if included in section 11011 of Pub. L. 115–97, see section 101(d)(1) of Pub. L. 115–141, set out as a note under section 62 of this title.
Amendment by section 11011(d)(3) of Pub. L. 115–97 applicable to taxable years beginning after
Amendment by section 13305(b)(4) of Pub. L. 115–97 applicable to taxable years beginning after
Amendment by Pub. L. 108–357 applicable to taxable years beginning after
Pub. L. 101–508, title XI, § 11522(c),
Pub. L. 99–514, title IV, § 412(a)(3),
Pub. L. 95–618, title IV, § 403(c),
Amendment by section 1901(b)(3)(K) of Pub. L. 94–455 effective for taxable years beginning after
Amendment by Pub. L. 94–12 effective
Pub. L. 93–499, § 2(b),
Pub. L. 91–172, title V, § 501(b),
Pub. L. 91–172, title V, § 502(b),
Pub. L. 89–809, title II, § 207(b),
Pub. L. 89–809, title II, § 208(b),
Pub. L. 89–809, title II, § 209(c),
Pub. L. 88–571, § 6(b),
Amendment by Pub. L. 87–834 applicable to taxable years beginning after
Pub. L. 86–564, title III, § 302(c),
Amendment by Pub. L. 85–866 applicable to taxable years beginning after
For provisions that nothing in amendment by section 11815(b)(1), (2) of Pub. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to
Pub. L. 87–312,
Pub. L. 87–321, § 2,
Pub. L. 85–866, title I, § 36(b),