Tax-Efficient Capital Planning Under OBBBA

OBBBA established several provisions that directly impact capital expenditures:

• 100% Bonus Depreciation Restored: Qualified property acquired and placed in service after Jan. 19, 2025, is now eligible for immediate expensing, reversing the phasedown under the Tax Cuts and Jobs Act (TCJA). 

• Section 179 Expensing Increased: The deduction cap increased to $2.5 million, with phase-outs beginning at $4 million. This is particularly useful for mid-sized acquisitions and certain property types not covered by bonus depreciation. 

• Interest Deduction Rules Shifted: OBBBA restored the use of EBITDA when calculating interest expense limitations under IRC §163(j), increasing potential interest deductibility for many capital-intensive organizations.

Together, these provisions reduce the after-tax cost of equipment and technology purchases, helping improve ROI.

• Liquidity vs. Longevity: Accelerated expensing can improve near-term cash flow and liquidity, but may reduce deductions available in future years, making long-range tax planning an important consideration. 

• Timing of Projects: Bonus depreciation deductions can be taken in the year the equipment is placed in service, meaning project go-lives can accelerate or delay the pacing of tax benefits.  

• Control in Elections: Under OBBBA, organizations may elect out of bonus depreciation on an asset class basis or apply transitional rates to better align deductions with investment cycles. Section 179 offers added flexibility by allowing companies to expense specific assets individually—often used first before applying bonus depreciation more broadly. 

• Financing Structures: OBBBA’s tax incentives most directly apply to capital/finance leases. At the same time, structures such as Fair Market Value leases and as-a-service models offer strategic benefits like capital flexibility, potential balance sheet advantages, and deductible lease payments.

• State Variability: Not all states conform to federal bonus depreciation rules. Conforming states provide both federal and state benefits, while non-conforming states may limit deductions— an important consideration for multi-state operations. 

By making 100% bonus depreciation permanent, OBBBA removed a major source of tax-related uncertainty in capital planning. As economic conditions continue to evolve, this legislation provides a more predictable framework for evaluating equipment and technology investments—helping organizations keep their capital working today while positioning for growth in the years ahead. 

U.S. Congress, One Big Beautiful Bill Act, July 2025