The newly signed One Big Beautiful Bill Act (OBBBA) makes it easier — and faster — for U.S. manufacturers to invest in automation, equipment, and even production buildings. For RMH Systems customers this means shorter payback periods and stronger ROI on upgrades that improve throughput, safety, and efficiency.

Here’s what matters for plant leaders, operations managers, and executives making capital decisions.

1. Equipment Write-Offs Are Back to Year One

What changed: You can now expense 100% of qualifying manufacturing equipment in the year it’s placed in service. This includes robots, conveyors, packaging lines, cranes, control systems, industrial PCs, scales, and safety equipment.

Why it matters: Instead of depreciating an automation system over 5–7 years, you can capture the full deduction immediately — shrinking the payback period and freeing cash flow faster.

Timeline: Applies to assets placed in service after January 19, 2025 with no sunset currently set for equipment expensing.

2. Production Buildings May Qualify for Full Deduction

What changed: For the first time, production buildings can qualify for immediate expensing if:

• Construction starts between Jan 20, 2025 – Dec 31, 2028
• The facility is placed in service by Dec 31, 2030

Why it matters: On a new build or major expansion, the building deduction can outweigh the equipment deduction. But only production space qualifies — not offices, breakrooms, or admin areas.

Tip: On drawings, clearly separate “production” vs. “non-production” areas so you don’t risk disqualifying the whole project.

3. Domestic R&D Back to Same-Year Expensing

What changed: Engineering, prototyping, controls development, and process trials performed in the U.S. are once again fully deductible in the year they’re incurred.

Why it matters: For industries running frequent process improvements, recipe development, or equipment trials, you can expense those costs right away.

Timeline: Effective for tax years beginning after Jan 1, 2025. Small businesses may be able to amend prior returns to recapture expenses retroactive to 2022.

4. Financing Is Friendlier with EBITDA

What changed: The limit on how much interest a business can deduct is now calculated on EBITDA — earnings before interest, taxes, depreciation, and amortization.

Why this matters in plain English:

• Under the old EBIT rules, depreciation and amortization (non-cash charges) reduced the amount of deductible interest.
• Now, with EBITDA, you get to ignore those accounting deductions when calculating the limit.
• That means more of your borrowing costs are deductible, making it easier to use smart debt to fund automation and expansion projects.

Practical example: If your facility is financing a $5M packaging line or crane system, you may now be able to deduct significantly more of the loan interest than before — improving after-tax ROI and cash flow.

5. Extra Help for Small and Mid-Sized Manufacturers

• Higher Section 179 limits make steady refresh cycles easier.
• The 20% pass-through deduction for many S-corps and LLCs is now permanent.

These changes boost after-tax cash to reinvest in equipment and automation — without waiting for a “big capital year.”

Why it matters: For smaller manufacturers, cash flow is often the single biggest constraint on growth and modernization. These changes put more after-tax cash back in your pocket, making it easier to:

• Upgrade machinery or automation in manageable phases instead of waiting for one big capital budget year.
• Spread investments across packaging, conveyors, robotics, and controls without worrying about losing tax efficiency.
• Keep pace with larger competitors by adopting automation and safety upgrades sooner, not later.
• Provide certainty for planning — since the pass-through deduction is now permanent, you can make longer-term investment decisions without worrying about a sudden tax code rollback.

Key Timelines at a Glance

Provision	Timeline	Action Item
Equipment expensing	Applies to property placed in service after Jan 19, 2025	Prioritize automation projects that can go live quickly
Production buildings	Start construction by 12/31/2028 and place in service by 12/31/2030	Back-plan milestones in Gantt charts to hit the window
Domestic R&D expensing	Effective 1/1/2025; retroactive relief possible back to 2022 for some	Keep R&D trials/documentation onshore where possible
Financing (EBITDA)	Effective 2025 onward	Ask lenders to re-run ROI with new debt deductibility
Section 179/QBI deduction	Permanent	Build into annual refresh and tax planning cycles

How RMH Systems Helps You Capture the Opportunity

At RMH Systems, we’re more than an equipment vendor. We’re your one-stop shop for fully automated solutions, including:

• Material Handling (conveyors, AS/RS, lift systems)
• Packaging (automated lines, end-of-line solutions)
• Cranes (overhead and custom systems for production and maintenance)
• Robotics (palletizing, pick-and-place, collaborative robots)
• Engineered Controls (automation, PLC programming, safety, and integration)

Why this matters now:

• We help sequence projects so construction starts, go-lives, and commissioning hit the tax-law windows.
• We can phase automation rollouts, so deductions and ROI begin earlier.
• Our engineers document and tag assets clearly, making it easy for your CPA to maximize available deductions.
• Because we cover all major systems under one roof, you don’t have to coordinate multiple vendors — saving time, reducing risk, and ensuring your investment plan is aligned with both operational and financial goals.

Bottom Line

This law is pro-capex and pro-manufacturing. For manufacturers — whether you’re modernizing a production line, automating a packaging cell, or expanding production space— the math just got better.

Faster deductions, more deductible interest, and bigger building incentives mean projects that were borderline may now clear the ROI hurdle.

This content is for general information only and is not tax advice. Every manufacturer’s situation is different — please consult a qualified tax professional before making decisions. RMH Systems is not a tax advisor and assumes no liability for actions taken based on this information.

👉 Talk to RMH Systems about how to align your next project with the new incentives.

Sources

– The Wall Street Journal: Companies Reap Cash Savings From Trump’s New Tax Law
– Investopedia: Factories, Data Centers Will Get A Boost From The ‘One Big, Beautiful Bill’
– KPMG: Advanced Manufacturing Investment Credit insights
– The Tax Adviser: CHIPS Act Final Regulations
– RBT CPAs: Key Takeaways for Manufacturers from the One Big Beautiful Bill Act
– TDA CPA: OBBBA 100% Write-Off for U.S. Manufacturing Property
– Withum: OBBBA’s Impact on Manufacturers