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Carl Villella, CLFP President, Acceptance Leasing & Financing Service
Don’t Forget! You Saw it in the
Adverti$$er
August 2025 #17313 Page #83
Strategic Capital Investment: Leveraging Section 179 Expansion and Multi-Entity Structures in the Building Component Manufacturing Industry Post-OBBBA
T
he recently enacted One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, marks a transformative moment for U.S. tax policy, particularly for capitalintensive sectors like building component manufacturing. This comprehensive legislation significantly expands Section 179 expensing and permanently restores 100% bonus depreciation, creating an unprecedented environment for immediate tax deductions on qualifying equipment investments. For building component manufacturers, whose operations rely heavily on specialized machinery for efficiency, precision, and scalability, these updates offer a powerful lever for optimizing cash flow, accelerating growth, and enhancing competitiveness. The ability to immediately expense a larger portion, or even the full cost, of new and used equipment can dramatically reduce taxable income, freeing up critical capital for reinvestment and strategic expansion. The indispensable role of professional tax advisory and integrated financial planning cannot be overstated. Consulting experts is crucial to ensure compliance with IRS regulations (especially controlled group rules), maximize tax savings, optimize cash flow, and support long-term growth.
Section 179 Expansion: Unlocking Immediate Expensing Opportunities The OBBBA has significantly expanded the Section 179 deduction. For the 2025 tax year, the maximum Section 179 deduction limit has doubled from $1.25 million to an impressive $2.5 million. The deduction begins to phase out dollar-for-dollar when total eligible purchases exceed $4 million, a substantial increase from the previous $3.13 million threshold, fully phasing out at $6.5 million. This expanded threshold ensures that a broader range of businesses, particularly small and mid-sized entities, can take full advantage. Section 179 allows businesses to deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year, provided it is placed in service in that same year. For building component manufacturers, this includes: •
Machinery and equipment: Automated production lines, fabrication machinery, welding equipment, cutting tools, material handling systems. Continued next page
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