Promoting Domestic Energy Production Act

This bill proposes to amend the Internal Revenue Code of 1986, specifically Section 56A(c)(13), to modify how intangible drilling and development costs (IDCs) are treated when computing adjusted financial statement income (AFSI). The primary goal is to allow these significant expenses, incurred in oil and gas exploration and development, to be factored into the calculation of AFSI, thereby potentially reducing the corporate alternative minimum tax liability for energy companies. Under the proposed changes, AFSI would be reduced by deductions allowed for expenses under section 263(c) , which pertains to IDCs, to the extent these amounts are deducted in computing taxable income. Furthermore, the bill mandates disregarding certain depreciation and depletion expenses from the taxpayer's applicable financial statement related to these costs when calculating AFSI. These amendments are set to take effect for taxable years beginning after December 31, 2025.