The return of 100% bonus depreciation is a game-changer for any business that relies on essential equipment. Thanks to the recently passed “One Big Beautiful Bill Act” (OBBBA), companies can now fully deduct the cost of qualifying equipment in the same year it’s placed into service creating major tax savings and improved cash flow.
This change applies to equipment placed in service after January 19, 2025, and it’s already reshaping how businesses approach buying and financing equipment. Whether you’re a business owner planning to upgrade your fleet or a vendor selling heavy equipment, this is a key opportunity to act.
What Is Bonus Depreciation?
Bonus depreciation is a tax incentive that allows businesses to deduct a large portion of equipment costs in the year it’s purchased and placed into service. In this case, the law restores the ability to deduct 100% of the purchase price right away, instead of spreading it out over multiple years. That means when you buy a qualifying asset, you can immediately write off the entire cost on your taxes. This helps reduce your taxable income for the year.* The updated law makes it available for both new and used equipment, as long as the asset is “new to you” and placed in service after January 19, 2025.
Section 179 and Phase-Out Threshold Updates
The OBBBA also significantly enhanced Section 179. Starting in 2025, businesses can now expense up to $2.5 million in qualifying equipment purchases under Section 179, up from the previous limit of $1.22 million. The phase-out threshold has also increased to $4 million, allowing more businesses to take full advantage of the deduction before it begins to phase out. This expanded limit makes Section 179 an even more valuable tool, especially for small and mid-sized companies planning to invest heavily in equipment.*
Why This Matters for Buyers
For buyers, this means massive upfront tax savings. If your company purchases equipment and puts it into service in 2025, you can deduct the entire amount that year. Depending on your tax rate, that could translate into large tax savings—money that can be reinvested into operations, staff, or more equipment. Financing also plays a role. Under the new law, increased interest deductions give businesses a stronger incentive to finance rather than pay cash. This allows businesses to keep funds accessible while still taking advantage of the full tax benefit.
What Vendors Need to Know
If you’re a vendor or equipment dealer, this law is an opportunity to accelerate your sales cycle. The tax benefit may push buyers who’ve been waiting to finally move forward with purchases. It also gives you the opportunity to re-engage with past leads and explain why now is the time to act. Offering financing options will be more important than ever. As customers look to utilize the new rules without tying up capital, flexible payment plans and leases will help close more deals.
The return of 100% bonus depreciation creates real savings and growth opportunities for both buyers and sellers of heavy equipment. Whether you’re upgrading your fleet, expanding operations, or helping customers do the same, this is a chance to reduce taxes, improve cash flow, and invest in your business’s future.
*Please consult your tax consultant/accountant to fully understand the benefits and implications of Section 179 and 100% bonus depreciation.