The One Big Beautiful Bill Act modifies the existing bonus depreciation rules that currently allow businesses only a 40% depreciation deduction in the first year that qualifying assets are acquired. Under the recently enacted law, bonus depreciation in year one is again increased to 100% — and made permanent for qualified property that is acquired and placed into service on or after Jan. 19, 2025.
Another elective 100% depreciation deduction is allowed for certain “qualified production property.” This additional deduction is allowed only through 2030. Qualified production property is defined to include newly constructed (and some existing) non-residential real estate used for manufacturing, production or refining of defined tangible personal property within the United States.
We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about the Trump tax legislation making 100% bonus depreciation permanent.
Below is a summary of the debate that ensued between the two professors.
Their Votes:
Their Reasons:
Byrnes: For years, we've been in a near-constant state of limbo over the application of the bonus depreciation rules, which tend to flip flop back and forth as administrations change. By making the 100% first-year bonus depreciation permanent, Congress has now given business owners the certainty that they need and deserve.
Bloink: Yes, we should be encouraging certainty to further economic growth and help our small-business owners. The tax bill’s final provision on bonus depreciation, as enacted, is a giveaway to the largest corporations in this country — yet another benefit for the wealthy. This is the last thing this dramatic piece of legislation needed.
Byrnes: The “one big beautiful bill” has given us the level of certainty serving to ensure that businesses will continue to invest in growth and, in turn, supporting the strong economic growth that Americans voted for when they elected President Donald Trump to another term.
Bloink: The bonus depreciation rules could have been modified to ensure they support the small-business owners that they're meant to support. Income limitations would serve to provide support and certainty for small businesses while limiting the benefit for the largest corporations that have already received disproportionate benefits under this new tax law — not to mention the 2017 tax reforms.
Byrnes: Trump campaigned on certain promises, and now his administration is following through on those promises. Our economy has been moving through a period of stagnation in the wake of former President Joe Biden’s inflation-driven economy. With this new big, beautiful bill, we’ll be well positioned to begin moving positively toward the strong economy that Americans have been missing for the last four years. When businesses invest in growing their own enterprises, the entire economy prospers.
Bloink: We all know how the word “permanent” functions under the tax code. Nothing in the Internal Revenue Code is ever truly permanent. Maybe this provision does create a sense of security in the permanence of this provision — but that could very well be a false sense of security. The law could have been drafted to ensure we weren’t providing yet another method for the very wealthiest corporations and Americans to avoid paying their fair share in taxes.
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