depletion allowance

American  

noun

1. a tax reduction allowed on income from exhaustible resources, as oil or timber.

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depletion allowance Cultural  

1. A deduction from taxable income based on the eventual exhaustion or waste of a natural asset, such as an oil field.

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Example Sentences

Most of these deductions come from domestic oil production, but oilmen can also use the depletion allowance to reduce U.S. taxes on their foreign income.

From Time Magazine Archive

Like the depletion allowance, the quota system is also justified as a means of encouraging exploration for more domestic reserves.

From Time Magazine Archive

Oilmen would finally lose their long-cherished depletion allowance.

From Time Magazine Archive

Even so, Congress has not been persuaded that exploration would be discouraged by a reduction in the depletion allowance.

From Time Magazine Archive

One reason is the depletion allowance, which basically permits oil companies to deduct from their tax bills 22% of the value of the oil that their wells produce.

From Time Magazine Archive