Sponsors (14)
The bill delivers immediate, broad tax relief for business investment (including farmers) and clearer rules for contract accounting, at the cost of lower federal revenue and skewed benefits toward larger, capital-heavy firms while creating some limits for long-lived asset treatment.
Businesses (including small businesses) can immediately expense 100% of qualifying asset costs placed in service after Sept 27, 2017, reducing taxable income in the year of purchase and encouraging near-term capital investment.
Farmers and orchardists can claim bonus depreciation for specified plants planted or grafted after the prior 2027 cutoff (the cutoff is removed), improving tax treatment for long-lived agricultural plantings.
Clarifies cross-references and recovery-period limits for percentage-of-completion property, reducing compliance ambiguity for firms using long-term contracts and easing tax planning and reporting.
Making 100% bonus depreciation permanent will reduce federal tax revenues, which could increase deficits, crowd out other spending priorities, or require higher taxes in the future.
Large, profitable and capital-intensive firms are likely to receive disproportionate tax benefits from immediate expensing, shifting advantages toward these firms relative to smaller or less-capitalized taxpayers.
Narrowing the §460(c)(6)(B) reference to property with 7-year or shorter recovery periods may exclude some long-lived assets from bonus treatment and complicate tax planning for contractors using percentage-of-completion accounting.
Based on analysis of 2 sections of legislative text.
Makes 100% bonus depreciation permanent for qualifying property placed in service (or plants planted or grafted) after September 27, 2017, and updates related Internal Revenue Code cross-references. It also narrows a related long‑contract provision to apply only to property with a recovery period of 7 years or less. The change is applied as if it were included in the original 2017 tax act provision.
Introduced January 22, 2025 by James Lankford · Last progress January 22, 2025