This is the first installment of our five-part series on the Budget Reconciliation Law—often called “One Big Beautiful Bill.” Our goal is to break it down and spotlight the key elements that matter most to business owners, helping you stay informed and empowered to drive growth.

PART 1: IMMEDIATE EXPENSING & BONUS DEPRECIATION

The recently enacted Budget Reconciliation Law— often referred to as the “One Big Beautiful Bill”—introduces
some of the most consequential business and investment incentives in over a decade. For businesses prepared to
act decisively, this legislation represents a rare opportunity to strategically leverage the tax code as a catalyst for
accelerated growth and long-term competitiveness. The bill establishes permanent provisions that provide
enduring tax stability and investment predictability, while also incorporating time-bound measures that reward
prompt and deliberate action.

One of these provisions being made permanent is the “immediate expensing and bonus depreciation,” which, if
leveraged correctly, can translate into substantial improvements in cash flow, reductions in the cost of capital, and
expanded capacity for reinvestment.
Bonus depreciation was first introduced as part of the Job Creation and Worker Assistance Act of 2002, designed
to stimulate business investment in the wake of an economic slowdown. Initially set at 30%, it allowed companies
to accelerate deductions for new capital purchases. The Jobs and Growth Tax Relief Reconciliation Act of 2003
increased this rate to 50%.

Over the following decade, bonus depreciation was periodically renewed and adjusted, often in response to
economic downturns, including the 2008 financial crisis. The Tax Cuts and Jobs Act (TCJA) of 2017 marked the
most significant expansion—raising bonus depreciation to 100% for qualifying property placed in service after
September 27, 2017, and before January 1, 2023. This allowed businesses to fully deduct the cost of eligible
assets in the first year, rather than spreading deductions over the asset’s useful life.

Originally scheduled to phase down annually and set to expire completely after 2026, the “Big Beautiful Bill” halts
this phase-out, permanently locking in full expensing for qualifying property. This makes immediate expensing a
lasting feature of the tax code, providing long-term certainty for capital-intensive industries and creating a
predictable environment for investment planning. This means businesses can write off the entire purchase price of
eligible assets in the same year they are put into use, rather than depreciating them over multiple years.

Property eligible for the expensing and depreciation includes:

• Machinery and Manufacturing Equipment
• Production Line and Assembly Equipment (automated assembly machines, bottling, canning, or labeling
  machinery, textile manufacturing and cutting equipment, automated sorting, weighing, and measuring
  systems)
• Specialized Industry Machinery (semiconductor fabrication tools and cleanroom equipment,
  pharmaceutical manufacturing and tablet press, agricultural processing equipment, woodworking
  machines, etc.
• Support & Ancillary Equipment (industrial HVAC systems dedicated to production environments, dust
  collection and ventilation systems for manufacturing floors, power generators and compressors, quality
  control and testing equipment directly related to production, etc.)
• Computers and Servers
• Vehicles over 6,000 lbs. and work-use vehicles modified for business use (box tucks, refrigeration,
  permanently mounted tools, etc.) and some vehicles under 6,000 lbs.
• Improvements to non-residential buildings (HVAC systems, fire protection, security systems, energyefficient
  lighting)

Other items to consider:

• The property can be either new or used. The 2017 rule change made used equipment eligible if it is the
  taxpayer’s first use.
• The property must be acquired and placed in service within the applicable tax year.
•  The property must have a recovery period of 20 years or less (most manufacturing machinery qualifies).
• Property improvements like building expansions, utility connections, and dedicated infrastructure to
  support the equipment may also qualify if they are considered part of the production system.

Example: A mid-sized construction firm purchases a $350,000 excavator to expand its site development
capabilities. Under 100% bonus depreciation the company can deduct the full purchase price in the year the
machine is placed in service.

• At a 21% corporate tax rate, the deduction reduces taxes by $73,500 in year one.
• That $73,500 in retained cash can be reinvested immediately covering the cost of hiring additional crew,
  bidding on larger projects, or upgrading other equipment.
• If the new excavator enables the company to take on two additional site prep projects annually, each
  netting $50,000 in profit, that’s $100,000 in extra annual revenue—on top of the initial tax savings.
• The combined $173,500 in first-year benefits (tax savings + additional revenue) covers nearly half the
  purchase price within 12 months, accelerating profitability and reducing financing pressure.

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Immediate expensing presents a strategic window of opportunity that smart businesses cannot afford to ignore. By
allowing you to deduct the full cost of qualifying assets in the year of purchase, it delivers substantial tax savings
and frees up valuable cash that can be reinvested to drive growth, innovation, and market expansion.

Acting quickly is essential securing these benefits now not only maximizes your financial advantage, but also
protects your business from the uncertainty of future tax law changes. For capital-intensive sectors such as
manufacturing, logistics, construction, technology, agriculture, and transportation, this is more than a tax break—it
is a chance to strengthen your competitive position, accelerate your investment plans, and build long-term
resilience.