Section 179 and the Big Beautiful Bill: A Win for Manufacturing Facilities

On July 4, 2025, the U.S. tax landscape shifted dramatically with the enactment of the One Big Beautiful Bill Act (OBBBA), a sweeping piece of legislation that brings significant tax relief and incentives to manufacturing facilities across many different industries. Among the most impactful changes for food manufacturers is the enhancement of Section 179, which now offers even greater opportunities to invest in advanced equipment such as the Mag-Ram® Automatic Self-Cleaning Magnetic Separator.

What Changed in Section 179?

The increase in Section 179 deduction limit to $2.5 million, with a phase-out beginning at $4 million, is more than just a number. It reflects a strategic push by lawmakers to stimulate domestic manufacturing and encourage reinvestment in critical infrastructure. For food manufacturers, this means the ability to invest in high-performance equipment without the burden of spreading deductions over multiple years.

This change is especially beneficial for mid-sized facilities that often operate on tight margins and need to balance safety upgrades with financial constraints. By allowing immediate expense, Section 179 helps businesses preserve cash flow, reduce taxable income, and reinvest in operational improvements more quickly.

Why This Matters for Food Manufacturers

Metal contamination is one of the most serious threats to food safety and brand reputation. Recalls due to metal fragments can result in millions of dollars in losses, regulatory penalties, and long-term damage to consumer trust. The Mag-Ram® system is specifically engineered to address this risk by providing continuous, automated cleaning of magnetic separators, eliminating the need for manual intervention and reducing downtime.

In addition to compliance with HACCP and FSMA, the Mag-Ram® also supports GFSI-recognized standards such as BRCGS and SQF, making it a versatile solution for facilities exporting to international markets. With Section 179 enhancements, manufacturers can now justify the investment not only from a safety standpoint but also from a financial and operational efficiency perspective.

With the enhanced Section 179 deduction, facilities can now:

• Fully expense the cost of Mag-Ram systems in the year of purchase.
• Accelerate ROI by reducing taxable income.
• Improve food safety and operational efficiency without waiting for multi-year depreciation schedules.

Strategic Timing for Capital Investment

Timing is everything when it comes to tax planning. Because the new Section 179 limits apply to equipment placed in service in tax years beginning January 1, 2025, manufacturers who act now can maximize their 2025 tax benefits. This is particularly relevant for facilities planning upgrades during scheduled maintenance shutdowns or seasonal production lulls.

Additionally, combining Section 179 with 100% bonus depreciation allows businesses to layer deductions, potentially eliminating taxable income altogether in the year of purchase. This dual benefit makes 2025 a strategic year for capital investment in contamination control and other critical infrastructure.

Additional Tax Incentives in the Big Beautiful Bill

Beyond Section 179, the bill also includes:

• 100% first-year bonus depreciation for qualified production property.
• Optional expensing of U.S. research and experimental expenditures, which may benefit facilities investing in process innovation.
• Permanent extension of the 20% deduction for passthrough business income, helping privately held manufacturers reduce their effective tax rate.

Accounting Considerations

The KPMG report highlights that the date of July 4 enactment means businesses must reflect these changes in their 2025 interim and annual financial statements. This includes adjustments to deferred tax assets and liabilities, valuation allowances, and disclosures under ASC 740.

For CFOs and controllers, this means working closely with tax advisors to ensure that the timing of purchases, method of expense, and financial reporting are aligned. Transparency in financial disclosures will be key, especially for publicly traded companies or those undergoing audits or due diligence.

 KPMG Report – Accounting for Income Taxes: One Big Beautiful Bill (May 15, 2025)

Take Action Now

If you’re considering upgrading your magnetic separation systems, now is the time to act. The enhanced Section 179 deduction makes it more financially viable than ever to invest in the Mag-Ram®, ensuring your facility meets the highest standards of food safety and compliance.

Contact Magnattack Global today to learn how the Mag-Ram, or any other magnetic separator from Magnattack, can be tailored to your facility’s needs and how you can take full advantage of the new tax incentives.