
Courtesy Hedley & Co. CPAs
By Kevin M. Hedley, MS, CPA, PFS
The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, represents a sweeping overhaul of U.S. business taxation, with significant implications for federal and state tax planning, and corporate investment strategy. This article is a brief summary of some of the key business tax law updates introduced by OBBBA, focusing on the most impactful provisions for corporations and their practical implications.
100% Bonus Depreciation Made Permanent
OBBBA permanently restores 100% bonus depreciation for qualified property. This allows businesses to immediately deduct the full cost of most tangible property placed in service after January 19, 2025. This provision, which had been scheduled to phase down under prior law, now provides a powerful incentive for capital investment by enabling immediate expensing rather than requiring depreciation over several years. The law also introduces a transitional 40% bonus depreciation rate for property placed in service in the first tax year ending after January 19, 2025, if the taxpayer elects this treatment.
New 100% Deduction for Qualified Production Property (QPP)
A major innovation is the creation of Section 168(n), which allows a 100% immediate deduction for certain nonresidential real property used in qualified production activities—primarily manufacturing, production, or refining of tangible personal property. This deduction is available for property placed in service after January 19, 2025, and before January 1, 2031. The provision is elective and subject to recapture if the property ceases to be used in a qualified production activity within 10 years. This is a significant departure from the traditional 39-year straight-line depreciation for nonresidential real property, and it is designed to spur domestic manufacturing investment.







