The House has passed the One Big Beautiful Bill Act, a sweeping tax reform package that brings real, bottom-line benefits to American manufacturers. Whether you’re in stamping, fabrication, or systems integration, this bill opens the door to smarter investment, improved cash flow, and long-term growth.
Here are the 5 most important takeaways manufacturers should understand — and why they matter.
Manufacturers can now deduct 100% of the cost of eligible machinery, equipment, and certain internal improvements in the same year the investment is made. This bonus depreciation provision applies to production-critical assets like stamping presses, servo feeds, laser tables, and automation systems.
Relevant Provision:
Section 102 of the Tax Relief for American Families and Workers Act of 2025 extends 100% bonus depreciation for qualified property placed in service from January 1, 2023 through December 31, 2025. This includes tangible personal property used in manufacturing operations.
Why it matters:
If you’re investing in new floor space, production lines, or a satellite plant, this gives you a massive tax incentive to move forward. You can improve your physical footprint and see the tax benefit right away, boosting cash flow in the current year.
The law temporarily extends the full and immediate expensing of capital equipment. Stamping presses, servo feeds, laser tables, robotic welders—if it powers production, it’s deductible in the year you buy it, at least through the end of 2025.
Relevant Provision:
The bill extends the 100% bonus depreciation provisions from the 2017 Tax Cuts and Jobs Act, allowing businesses to continue fully deducting the cost of qualified equipment purchases placed in service through December 31, 2025.
Why it matters:
Manufacturing is equipment-intensive. This provision reduces the financial friction of investing in new machinery, especially during times when margins are tight. It helps turn capital investments into immediate tax savings—but keep in mind, this benefit is temporary unless Congress acts again.
The bill allows you to deduct 100% of qualifying research and development costs in the same year they occur—no more five-year amortization. This applies to prototyping, material testing, product development, and even customer-driven process innovation.
Relevant Provision:
The legislation restores immediate expensing for research and development expenditures, reversing the previous requirement to amortize these costs over five years.
Why it matters:
Even if you’re not a “tech company,” you probably qualify for R&D credits. If you’re experimenting with new materials, customizing dies, testing feed strategies, or running first-offs, you’re likely doing R&D—and this change makes that innovation cheaper to pursue.
Previously, companies faced tight restrictions on deducting interest on financed purchases. Those limits have now been loosened, giving manufacturers more breathing room when using loans or equipment leases to grow.
Relevant Provision:
The bill modifies the limitations on business interest expense deductions, allowing for greater deductibility of interest payments on financed purchases.
Why it matters:
Most manufacturers finance at least some portion of their equipment or expansion projects. This provision allows more of that interest to be deducted, effectively lowering the cost of borrowing and making growth more affordable.
Many business tax provisions that were set to expire have now been given temporary extensions through 2025. That includes the full expensing rules and several other deductions manufacturers rely on.
Relevant Provision:
The bill temporarily restores several provisions from the 2017 Tax Cuts and Jobs Act—including full expensing (100% bonus depreciation) and immediate R&D expensing—but only through 2025. These changes are not permanent and will require future congressional action to extend beyond that.
Why it matters:
By reinstating these deductions through 2025, manufacturers can plan capital and innovation projects with greater certainty over the next few years—but they should also be aware of the sunset dates and structure investments accordingly.
The new tax law, if passed, creates a friendlier financial environment for manufacturers who want to reinvest, modernize, and scale. From expensing new facilities to getting more out of R&D and financing, the bill rewards smart growth.
If you’re evaluating equipment purchases, capital projects, or R&D efforts this year, now is the time to revisit your plans—with the tax code working in your favor.
Now is the time to act! Get quote today.
