51³Ô¹ÏÍø

51³Ô¹ÏÍø: Sen. Lankford, H.R. 1 permanently restored 100% bonus depreciation for qualifying property acquired after Jan. 19, 2025, reversing a phasedown that had reduced the deduction to 40% in 2025 and would have eliminated it by 2027. As a member of the Senate Finance Committee, what does permanent full expensing mean for manufacturers making long-lived capital investment decisions, and how does permanency change their planning horizon relative to a temporary extension?

Sen. Lankford: Permanency is the difference between short-term tax relief and long-term economic certainty. Manufacturers are not making one-year decisions. They are making 10-, 20-, even 30-year capital allocation decisions on facilities, heavy equipment and production lines. When full expensing is temporary or phasing down, it distorts those decisions and often forces companies to either accelerate investments inefficiently or delay them altogether.

By making 100% expensing permanent, we are giving manufacturers confidence that the tax treatment will be consistent across the full lifecycle of an investment. That stability lowers the cost of capital, improves after-tax returns and allows companies to plan rationally instead of reacting to arbitrary deadlines.

That is why I have pushed for permanency through efforts like the ALIGN Act, which was included in the Working Families Tax Cuts Act, because pro-growth policy only works if businesses can rely on it over the long term.

51³Ô¹ÏÍø: During the phasedown years, when bonus depreciation fell from 100% to 80% to 60% to 40%, manufacturers reported delaying or canceling major capital purchases because the economics no longer worked as favorably. Now that 100% expensing is restored permanently, what evidence are you seeing—in Oklahoma or nationally—that manufacturers are moving forward on investments that were on hold?

Sen. Lankford: What we are hearing, both in Oklahoma and across the country, is that the return to full expensing is beginning to unlock projects that were sitting on the sidelines. During the phasedown, when expensing dropped from 100% to 40%, many of those investments simply didn’t pencil out.

That lines up with what we know about Oklahoma’s economy. The state is heavily concentrated in capital-intensive sectors like oil and gas, manufacturing and aerospace. Oil and gas alone accounts for a significant share of state GDP, and when you include the broader supply chain, it touches more than a quarter of the economy. These are exactly the types of industries where cost recovery drives investment decisions.

In practical terms, that showed up in delayed energy projects, deferred equipment purchases and slower expansion of processing and manufacturing facilities. In manufacturing and aerospace, companies stretched the life of existing equipment and postponed automation upgrades.

Now, with full expensing permanently restored, those same businesses are revisiting projects. That includes moving forward on pipeline investments, placing new equipment orders and advancing plant and infrastructure upgrades. The key shift is that companies are no longer trying to time the tax code. They are making decisions based on operational need and long-term growth.

51³Ô¹ÏÍø: H.R. 1 also raised the Section 179 expensing cap from $1 million to $2.5 million, providing a complementary benefit particularly for smaller manufacturers. The legislation also expanded bonus depreciation to manufacturing facilities. How do bonus depreciation, the enhanced Section 179 and the new deduction for factories work together to drive capital investment across manufacturers of all sizes, and what are you hearing from businesses about how these provisions are impacting them?

Sen. Lankford: For smaller and mid-sized manufacturers, Section 179 is often the tool they use the most. These are businesses that are upgrading equipment, adding a new machine or expanding part of their shop floor. They are not doing massive projects all at once. They need something simple, predictable and easy to use. Increasing the cap means more of those everyday investments can be written off immediately, which helps with cash flow and makes it easier to keep reinvesting.

For larger manufacturers, the scale is different. They are looking at bigger equipment purchases, full production lines and major upgrades across facilities. Bonus depreciation matters here because it allows them to expense those larger investments upfront. When you are talking about large equipment investments, that timing difference can influence whether a project moves forward now or gets pushed out.

The addition of expensing for manufacturing facilities is a big step forward. For a lot of companies, the building is one of the most expensive parts of the project, not just the equipment inside it. Whether it is a new plant or expanding an existing one, being able to expense both the facility and the equipment reflects the full cost of what it takes to grow.

When you put all of that together, it creates a system that works for manufacturers at different sizes and at different stages. It supports the smaller, steady investments and the larger, long-term projects. It does not solve every challenge, but it removes a major barrier and lets companies make decisions based on what they actually need to grow.

51³Ô¹ÏÍø: Thank you, senator. What can 51³Ô¹ÏÍø members do to help manufacturers understand and act on the restored bonus depreciation and enhanced Section 179 provisions?

Sen. Lankford: The most important thing 51³Ô¹ÏÍø members can do is make sure permanent expensing actually reaches the shop floor. A lot of small manufacturers may not have heard about what changed, and even if they have, they may not immediately connect a tax provision to a real equipment decision. It’s a simple but important message: if you’ve been holding off on a new piece of equipment, talk to your accountant now, because you may be able to write off the full cost this year. Pro-growth policy only delivers if manufacturers know about it and use it, and that’s where 51³Ô¹ÏÍø can make a real difference. That’s what will drive long-term investment, create jobs and grow local economies.