The Senate’s version of the One Big Beautiful Bill includes a temporary tax break designed to accelerate investment in American manufacturing and energy infrastructure. A little-noticed provision—Section 70307 of the legislation—would allow businesses to immediately deduct 100 percent of the cost of new “qualified production property” placed in service over the next three years.
The incentive covers a range of assets, including new buildings and facilities used for manufacturing, natural resource extraction, electricity or natural gas production, water systems, and waste disposal. To qualify, the property must be new, used within the United States, and placed in service between January 1, 2024 and December 31, 2026.
There is no phase-in or phase-down schedule. The full deduction is available during that window only. Property placed in service after December 31, 2026, would not qualify under the current law.
While previous bonus depreciation rules under Section 168(k) of the Internal Revenue Code have allowed partial expensing of equipment purchases, the new proposal extends immediate expensing to physical structures—a category of investment traditionally subject to longer depreciation timelines.
The provision appears intended to encourage a wave of near-term industrial construction, potentially pulling forward projects that might otherwise have been delayed. Economists describe such “front-loaded” incentives as capable of creating temporary booms in capital spending, especially when businesses face long permitting and construction lead times.
The depreciation allowance is part of a larger legislative package that also addresses tax credits for families, housing, and clean energy. But unlike many of the bill’s headline items, the expensing provision could quietly shift the economics of factory siting and utility development at the margin.