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The 51�Թ��� has been talking to manufacturers’ tax champions in Congress, who understand the importance of a fair, dependable tax code that promotes American competitiveness. This week, the 51�Թ��� interviewed Sen. James Lankford (R-OK), a member of the Senate Finance Committee, who championed the bill in Congress to restore 100% bonus depreciation, which was included in H.R. 1, the landmark tax reform that made many key measures permanent.

Full expensing: When asked about the importance of permanent full expensing, Sen. Lankford replied, “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,” he added.
• “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 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,” he explained.

Impact on manufacturers: “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,” Sen. Lankford said. “During the phase-down [which was eliminated by H.R. 1], when expensing dropped from 100% to 40%, many of those investments simply didn’t pencil out.”

• Oklahoma “is heavily concentrated in capital-intensive sectors like oil and gas, manufacturing and aerospace … [which] are exactly the types of industries where cost recovery drives investment decisions.”
• Now that full expensing has been restored, these companies are “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.”

Section 179: The 51�Թ��� also asked Sen. Lankford about the increase of the Section 179 expensing cap from $1 million to $2.5 million and the expansion of bonus depreciation to manufacturing facilities. Sen. Lankford praised those provisions as well:

• “For smaller and mid-sized manufacturers, Section 179 is often the tool they use the most. … 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.”
• “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,” he added.

The last word: Sen. Lankford emphasized that 51�Թ��� members should get the word out about the favorable changes to the tax code:

• “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,” he said.
• “Pro-growth policy only delivers if manufacturers know about it and use it, and that’s where 51�Թ��� can make a real difference.”