Congress made bonus depreciation permanent to encourage investment. It may have made companies worse at capturing it.

Deadlines are underrated management tools. Nothing focuses a capital planning process like a benefit that is about to shrink.

From 2018 through 2024, bonus depreciation had a built-in deadline. The 2017 tax law set 100% expensing to step down to 80%, then 60%, then 40%. Every December, CFOs knew exactly what waiting would cost. Equipment orders were accelerated, installation schedules were compressed, and tax directors were pulled into capital meetings because the stakes were on the calendar.

Then the One Big Beautiful Bill Act made 100% bonus depreciation permanent for property acquired after January 19, 2025. The cliff disappeared. So, it turns out, did much of the discipline.

Our research suggests mid-sized and large companies captured roughly 61% of the OBBBA acceleration value available to them on 2025 capital spending. Decision-makers we surveyed described the year as one of claiming whatever showed up on the fixed asset ledger rather than designing capital programs around the new rules. Sentiment among CFOs moved from anticipation when the law passed to a quiet assumption that the benefit was being captured automatically.

It is not, and permanence is part of the reason.

The Deadlines Did Not Actually Go Away

Permanence applies to the bonus percentage. It does not apply to the calendar. An asset placed in service on December 28 still produces a deduction a full year earlier than one placed in service on January 4, and that year is still worth something on every dollar.

Permanence does not apply to the time value of money either. A deduction that becomes a loss carryforward still loses value every year it waits, whether or not the bonus percentage is scheduled to change.

And permanence does not apply to everything in the law. The new 100% deduction for production facilities requires construction to begin before January 1, 2029. That is a hard deadline on the single largest incentive in the act, and manufacturers who treat it with the same relaxed attitude they now apply to equipment will miss it.

What Complacency Costs

Consider a manufacturer with $25 million of equipment in its 2026 pipeline. Under the phase-down, a CFO would have been in the room in September asking which machines could be running by year end, because every asset that slipped would have lost 20 points of bonus. Under permanence, nobody asks. Suppose a third of that equipment slides into January because financing was arranged late and installation was scheduled for convenience. The bonus percentage does not change, so it feels like nothing was lost. But $8 million of deductions just moved a year, and at an 8% discount rate that costs roughly $125,000 in present value. No one will ever see that number, because no report produces it.

That is the insidious part. Under the phase-down, missing a deadline produced a visible loss. Under permanence, it produces an invisible one. Invisible costs are the ones organizations stop managing.

The Wrong Lesson From the Phase-Down

Some finance leaders have concluded that the phase-down years were a distortion, a period when tax considerations pushed companies into acquiring equipment on artificial timelines. There is something to that. But the right lesson is not that tax should stop influencing capital decisions. It is that tax should influence them through planning rather than panic. The phase-down forced companies to coordinate operations, finance, and tax. Permanence gives them the chance to do the same thing deliberately, every year, without the scramble.

Invent Your Own Cliff

The companies capturing full value have done something simple. They replaced the deadline Congress removed with one of their own.

They review the capital plan with tax and treasury every quarter, not once a year. They map projected taxable income against planned acquisitions so they know which years can absorb large deductions. They treat December 31 as a hard placed-in-service deadline for every asset in the pipeline, and they line up financing early enough to hit it. They set a facility decision date well ahead of 2029.

None of this is sophisticated. It is just disciplined, and discipline is exactly what an open-ended benefit erodes. It also requires capital partners who operate on the same calendar. A financing process that takes three months to approve equipment ordered in September guarantees that some of it lands in the wrong year, no matter how well the rest of the plan was built. The companies doing this well choose their capital sources partly on whether they can close before the deadline they set for themselves.

Congress removed the cliff. It did not remove the cost of standing still.