Industry Insight

The Big Beautiful Bill and What It Means for Your Machine Shop

Current as of June 2026. Tax provisions change; confirm details with your CPA.

For most of the last few years, buying a machine meant doing the depreciation math the slow way. You bought the iron, put it to work, and wrote off a slice of it each year while the deduction crept along behind the cash you had already spent. Bonus depreciation was phasing down, 80% in 2023, 60% in 2024, on its way to zero. The tax code was quietly making capital equipment more expensive to own.

That reversed on July 4, 2025, when the One Big Beautiful Bill Act was signed into law. For a machine shop weighing a purchase, this is the most favorable equipment-buying environment in years, and the advantage is not limited to the big players. The provisions scale, and several of them land hardest for the small and mid-size shop. Here is what changed, and what it means whether you run one machine or forty.

100% Bonus Depreciation Is Back, and Permanent

The centerpiece for equipment buyers is the return of 100% bonus depreciation. Any qualifying asset acquired and placed in service after January 19, 2025 can be fully expensed in that first year. Qualifying property means most tangible business equipment with a recovery period of 20 years or less, which covers CNC machine tools, lathes, machining centers, automation cells, and the support equipment around them.

Two things make this version better than what shops are used to. First, it is permanent, not a phase-down on a countdown clock, so you can plan capital purchases over multiple years without racing a deadline. Second, and this is the part that matters most for anyone reading this on a used-equipment site: it applies to used machines, not just new ones. The only catch is that the equipment has to be new to you, meaning you did not previously own it.

A used machining center bought this year gets the exact same 100% first-year write-off as a new one off the showroom floor. Same tax treatment, a fraction of the purchase price. That is the quiet headline of this bill for the secondary market.

Run the comparison. A new machine at $400,000 and a comparable used machine at $150,000 both deliver a full first-year deduction. The shop buying used writes off $150,000, keeps $250,000 in the building, and runs the same parts. The tax code now rewards the buyer who spends capital efficiently rather than the one who spends the most.

Section 179 Doubled to $2.5 Million

Alongside bonus depreciation, the bill doubled the Section 179 expensing limit to $2.5 million, up from $1 million, and raised the phase-out threshold to $4 million in total qualifying purchases. Like bonus depreciation, Section 179 applies to used equipment, and the deduction begins to phase out dollar for dollar once total purchases pass the $4 million mark in a single year.

For a small or mid-size shop, the practical effect is that almost any realistic year of equipment buying can be fully expensed. A shop adding two or three used machines, a bar feeder, and a probing package is nowhere near the $2.5 million ceiling, which means the entire spend comes off the current year's taxable income. Section 179 and bonus depreciation work together, and a good accountant will sequence them to your advantage depending on your income picture.

R&D Costs Are Immediately Deductible Again

The bill also fixed a problem that had quietly squeezed shops doing process development. Since 2022, domestic research and development costs had to be capitalized and amortized over five years, which hit any shop developing new processes, fixturing, or programming for novel parts. Under the new law, domestic R&D expenses incurred from 2025 onward can be deducted immediately again.

There is a bonus for smaller operations: shops with $31 million or less in average gross receipts can go back and amend prior returns to claim deductions that were previously stretched out. If your shop did any qualifying development work in the last few years, that is a conversation worth having with your accountant before the amendment window closes.

100% Expensing for New Production Facilities

For shops in growth mode, the bill created an entirely new category called Qualified Production Property. Under it, the cost of a newly constructed manufacturing facility can be fully expensed in the year it is placed in service, rather than depreciated over the usual 39 years. On a multi-million dollar building, that is a deduction measured in millions taken at once instead of spread across four decades.

The rules are specific. Construction has to begin after January 19, 2025, the facility has to be placed in service before January 1, 2031, and the space has to be used for actual production, not offices, sales, or storage. The owner has to operate the production activity, and the shop has to keep the facility in qualified use for at least ten years or face a clawback. This one is built for the shop expanding its footprint, and it pairs with bonus depreciation on the equipment that goes inside the new walls.

What This Means at Every Scale

The one-to-five machine shop. This is where the used-equipment advantage is sharpest. Section 179 alone covers nearly any purchase you would realistically make, and 100% bonus depreciation backs it up. Buy a clean used VMC or turning center, put it in service this year, and the full price comes off your taxable income. The bill effectively lowers the real cost of adding capacity, and used iron is where that capital stretches furthest.

The mid-size shop. If you are buying several machines a year, or a spend that runs past the Section 179 cap, 100% bonus depreciation carries the rest with no ceiling. This is the moment to pull forward the capacity you were going to add over three years, because the first-year deduction is no longer a benefit you have to time around a phase-down. Used machines let you add more spindles per dollar while still capturing the full write-off on each one.

The large shop or group. The full stack is available to you: bonus depreciation on equipment, the doubled Section 179, immediate R&D expensing on process development, and Qualified Production Property if you are building. A planned expansion timed to these provisions can shift millions in deductions into the years you are spending the cash, which is exactly when you want them.

Resell CNC Take

We have watched a lot of tax cycles move equipment, and this is the most buyer-friendly one we have seen for the used market specifically. The reason is simple: the write-off does not care what you paid. New or used, the first-year deduction is the same percentage of the purchase price, which means the buyer who finds the right used machine keeps the difference and still books the full benefit. We expect a strong back half of the year as shops put capital to work before December 31, and the inspected, documented used machines move first. If you are planning a purchase, line it up with your accountant now rather than in the last week of the year.

A note on this article: Resell CNC sells machines, not tax services. The information here is general and based on publicly available summaries of the One Big Beautiful Bill Act as of June 2026. Tax outcomes depend on your specific situation, income, and entity structure. Confirm every provision and dollar figure with a qualified CPA or tax advisor before making a purchase decision based on tax treatment.

Frequently Asked Questions

Does the Big Beautiful Bill apply to used CNC machines?

Yes. Both 100% bonus depreciation and the Section 179 deduction apply to used equipment, provided the machine is new to your business and you did not previously own it. A used CNC machine placed in service after January 19, 2025 can qualify for the same first-year write-off as a new one, which is the central advantage of the law for buyers in the secondary market. Confirm eligibility with your CPA.

What is 100% bonus depreciation under the new law?

It is a provision that lets a business deduct the full cost of qualifying equipment in the year it is placed in service, rather than depreciating it over several years. The One Big Beautiful Bill Act permanently restored it for qualifying property acquired and placed in service after January 19, 2025. Qualifying property includes most equipment with a recovery period of 20 years or less, which covers CNC machine tools.

How much can I deduct under Section 179 in 2025?

The One Big Beautiful Bill Act raised the maximum Section 179 deduction to $2.5 million, up from $1 million, with the phase-out beginning once total qualifying purchases exceed $4 million in a tax year. Section 179 applies to both new and used equipment and is often used together with bonus depreciation. The figures are inflation-adjusted going forward.

When do the equipment provisions take effect?

100% bonus depreciation applies to qualifying property acquired and placed in service after January 19, 2025. "Placed in service" means the machine is set up and available for use in your shop, not simply ordered or paid for. The Qualified Production Property facility deduction requires construction to begin after January 19, 2025 and the building to be placed in service before January 1, 2031.

Is this tax advice?

No. This article is general information for machine shop owners and buyers, based on public summaries of the law. Resell CNC is an equipment dealer, not a tax advisor. The provisions, limits, and dates described here should be confirmed with a qualified CPA or tax professional who can apply them to your specific business before you rely on them for a purchase decision.