100% Bonus Depreciation Under OBBBA

Entrepreneurs in livery services, think taxis, limousines, and ride sharing fleets, and trucking/logistics companies, take note: The One Big Beautiful Bill, signed into law on July 4, 2025, has reinstated 100% bonus depreciation as a permanent fixture in the U.S. tax code.

This means businesses can now deduct the full cost of qualifying assets in the year they’re placed in service, a stark reversal from the fading deductions under the previous rules (which were set to drop to 40% this year). For asset-intensive industries like yours, this is a gamechanger, unlocking immediate cash flow to fuel growth, upgrades, and efficiency. Here’s a deep dive into why this matters and how it plays out with real world examples.

First, a quick primer on the revamped rules: Bonus depreciation now allows 100% upfront deductions for new or used equipment, vehicles, and other depreciable property with a recovery period of 20 years or less. This applies to assets acquired and in use after January 19, 2025 – watch those contract dates, as pre-existing deals stick to the old 40% rate. It’s permanent, no phase out looming, and pairs nicely with boosted Section 179 expensing limits (up to $2.5 million). The goal? Encourage bold investments in American businesses by slashing the after tax cost of capital expenditures.

For livery business owners, where your fleet is the heart of operations, this translates to faster fleet modernization and expansion. Vehicles like sedans, vans, and SUVs qualify, allowing you to write off the entire purchase price in Year 1 instead of amortizing over five years via standard depreciation. This immediate tax shield preserves cash for hiring, marketing, or navigating rising fuel costs.

Consider a NYC based limo company eyeing an upgrade amid post-pandemic demand surges. They purchase 10 new luxury vans at $60,000 each, totaling $600,000. Under the new 100% bonus depreciation, they deduct the full amount from taxable income right away. Assuming a 30% effective tax rate, that’s a $180,000 tax savings in the first year, funds that could cover driver salaries, app integrations for better booking, or even adding eco friendly electric models to attract premium clients. Without this, they’d only deduct a fraction upfront, tying up capital in slower write offs and potentially delaying growth.

Trucking and logistics firms, dealing with heavy-duty assets like semis, trailers, and warehouse tech, stand to gain even more. The industry thrives on efficiency, and bonus depreciation lowers the barrier to investing in fuel efficient rigs, GPS systems, or refrigerated units. It improves liquidity, helping offset volatile diesel prices or supply chain disruptions.

Take a Midwest logistics provider scaling up for the e commerce boom. They invest in five new trailers at $100,000 each, a $500,000 outlay. With 100% bonus depreciation, they wipe $500,000 off their taxable income immediately. At a 35% tax bracket, that’s $175,000 back in their pocket, enough to install advanced tracking software, hire additional route planners, or transition to hybrid trucks for greener, cost saving operations. In a competitive field where margins are thin, this accelerated deduction means quicker ROI and the ability to outpace rivals still crunching under old rules.

Beyond the numbers, the broader benefits ripple out: Lower effective costs spur job creation (more vehicles mean more drivers and support staff), combat inflation through productive investments, and support domestic manufacturing by favoring U.S. made assets. For used equipment, it works too, as long as it’s not from related parties, making it accessible for smaller operators bootstrapping their way up.

Of course, not every state conforms to federal depreciation rules, so check local impacts. And remember, you can elect out if it better suits your income strategy.