Daugherty Water for Food Global Institute


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Polzkill, S., Stejskal, A., Wilke, H., Wistrom, A., Gibson, K., Spiehs, M. & Brozović, N. 2017. Paid to Pump: How a tax credit could discourage conservation of the High Plains Aquifer. Daugherty Water for Food Global Institute Policy Brief #1.


In 1965’s United States v. Shurbet case, an irrigator from Texas asserted his claim for a depletion tax deduction for groundwater pumped from the High Plains Aquifer. He argued that the unique conditions of the southern High Plains region - a plateau where the shallow aquifer is recharged only through precipitation at a slow rate - meant the groundwater resource would be depleted in time. The state argued that groundwater was not fundamentally an exhaustible natural deposit, but the Supreme Court concluded the tax deduction was appropriate given the “peculiar” conditions in the area. It was stated the decision was not meant to establish a precedent regarding cost depletion of groundwater. The findings of the Shurbet case were intended to be limited to the southern High Plains region. However, in a 1980 lawsuit against the IRS, the Gigot brothers of Kansas sought to expand the deduction to allow depletion of the aquifer beneath their 30,000 acre farm in Kansas. The case was settled in the district court with a ruling allowing the brothers’ deductions to continue, thereby extending the Shurbet decision to include all landowners extracting from the approximately 174,000 square miles of land overlying the High Plains Aquifer. Currently, the estimated value of the credit is highest in parts of northern Texas, eastern Colorado, western Kansas, and south central Nebraska.