The new tax package — casually referred to as the “One Big Beautiful Bill” — includes powerful new and reinstated tax incentives aimed at bolstering domestic manufacturing and distribution. This legislation reverses several unfavorable changes in recent years and introduces new opportunities to reduce tax liability and improve capital investment strategies.
Let’s walk through the tax provisions that will impact manufacturers and distributors.
This change immediately boosts cash flow by allowing full write-offs of equipment purchases — including machinery, vehicles and warehouse automation tools — rather than spreading deductions over several years. It’s particularly valuable for operations undergoing facility expansions or modernizing production lines.
Smaller and mid-sized manufacturers can now fully expense larger purchases without triggering the phase-out. This makes investing in production technology, robotics and logistics infrastructure much more tax-efficient.
This reversal favors capital-intensive businesses. Manufacturers and distributors with substantial depreciation expenses (e.g., from machinery or fleet purchases) will once again enjoy increased interest deductibility — lowering effective borrowing costs and incentivizing reinvestment.
From prototyping new products to automating processes or upgrading packaging systems, manufacturers and distributors that innovate in the U.S. can now immediately expense those costs, thereby lowering taxable income and boosting the ROI of R&D efforts.
A new deduction for capital investments in real property primarily used for manufacturing, production or refining of tangible personal property.
This creates a significant tax advantage for companies expanding U.S.-based operations. Whether you're constructing a new manufacturing facility or upgrading an existing distribution hub, the entire cost of the building (not just equipment) may be deductible, offering a powerful incentive to build and expand domestically.
The One Big Beautiful Bill signals a decisive shift back toward policies that encourage domestic manufacturing, innovation and capital reinvestment. For business owners in this space, these provisions aren’t just updates — they’re opportunities.
If you’re a U.S.-based manufacturer or distributor, these changes could significantly reduce your tax bill and free up capital for future growth. Let's talk through what this could mean for your business in 2025 and beyond. Contact us online or call 800.899.4623 to discuss your situation.