By Keiter CPAs
Tax partner highlights H.R.1’s impact on manufacturers
Ryan Beethoven-Wilson, Tax Partner, analyzes the effects of H.R.1, formerly known as One Big Beautiful Bill Act (OBBBA), on manufacturing businesses in his article, “H.R.1’s Impact on Manufacturers”, featured in Industry Today®.
Article Excerpt
“A Win for Capital Investment”
“For manufacturers considering large capital expenditures, the H.R. 1 offers one of the most generous incentives in recent memory: the return of 100% bonus depreciation for qualified property placed in service after January 19, 2025. In practice, that means businesses can deduct the full cost of new equipment, machinery, or certain facility improvements in the year the asset is put to use, accelerating cash flow and improving ROI. H.R. 1 has also created a new property category described as “qualified production property”, which is generally domestic nonresidential real property used in manufacturing tangible personal property, subject to certain other qualifying criteria. Qualified production property with a construction period beginning after January 19, 2025, and completed before January 1, 203, is now eligible for immediate 100% bonus depreciation, whereas this was previously only depreciable over 39 years.”
Article Highlights
- Another standout provision of H.R. 1 is the restoration of immediate expensing for domestic research and experimental (R&E) costs, effective for tax years starting after 2024
- For companies involved in semiconductor production or related supply chains, the Advanced Manufacturing Investment Credit jumps from 25% to 35% starting in 2026
- While many provisions are designed to promote traditional and advanced manufacturing, HR1 significantly curtails clean energy tax incentives.
Want to understand how recent tax changes could affect your manufacturing business? Contact your Keiter Opportunity Advisor or Email | Call 804.747.0000
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More Insights from Keiter CPAsThe information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.
