Income tax depletion allowance

Landowners within the High Plains Water District service area who utilize groundwater produced from the Ogallala Formation in the business of irrigated farming may claim a cost-in-water income tax depletion allowance on their federal income tax return.

Depletion Quick Facts:

  • Taxpayer must have paid more for a tract of land because it had groundwater in storage
  • Based on annual depreciation
  • Directly related to the Internal Revenue Service (IRS) approved annual decline in water levels for individual tracts of land
  • HPWD contracts with a professional land appraiser
  • HPWD set up fee cost is $10
  • Provides an annual water “bank statement” to landowner

For more information, contact Jed Leibbrandt.
If this is your initial request, download the cost-in-water income tax depletion allowance form here.
If you have previously requested this service, download the reorder request form here.