Equipment dealers could see sales surge in wake of 100% bonus depreciation

Some equipment dealers could log record sales at yearend if they capitalize on 100% bonus depreciation and other tax breaks offered under President Donald Trump’s One Big Beautiful Bill Act, which restores full bonus depreciation, allowing businesses to deduct the cost of eligible new and used equipment placed into service after Jan. 19 2025.  

“We could set some all-time goals for our enterprise, and that’s always exciting when you get to enjoy that with your team,” Kris Realander, sales manager at Morrisville, N.C.-based Triangle Equipment Group, told Equipment Finance News.  

Expensing limit doubled 

The legislation also doubles the expensing limit under Section 179, which allows taxpayers to immediately deduct a fixed percentage of an asset’s upfront cost, up to $2.5 million, according to accounting and tax advisory firm Warren Averett. Moreover, the phase-out threshold under Section 179 rose from $3.1 million to $4 million, meaning the deduction is eliminated once total qualifying purchases exceed $6.5 million instead of roughly $4.4 million.  

Publicly traded dealership Alta Equipment Group expects the One Big Beautiful Bill “to serve as a tailwind for equipment demand,” Chief Financial Officer Tony Colucci said during the company’s Aug. 8 earnings call.  

“The reinstatement of 100% bonus depreciation and expanded Section 179 expensing limits have generated yearend demand for us in the past as customers look to capture these upfront tax benefits when purchasing heavy equipment.”

— Tony Colucci, CFO, Alta Equipment Group

Educating sales teams, customers 

While many customers may be aware of the tax breaks, dealers are not leaving it up to chance as they emphasize education, especially with newer businesses, Realander said.  

“A lot of these younger businesses, they may not know some of these things,” he said. “So, we can work on that and educate them.  

“I’m not their answer to all the questions, but I’m making them aware so they can possibly get with their accounting team or whoever does that, and then they can work on figuring out what their best scenario is.” 

Beyond a yearend sales boost, informing customers of bonus depreciation benefits and changing tax policies builds trust, setting the stage for additional equipment purchases in the future, Realander said.  

“If we can slow down a little bit and educate prospects, that carries a lot of weight,” he said. “That helps them come be a part of the Bobcat family when they know I’ve got their back and I’m trying to help them, and I’m not just trying to sell them a piece of equipment. … I’m trying to build a relationship and scale them. I want them to grow.” 

In addition, dealers must ensure that their sales representatives understand the tax breaks and that they’re “conveying it correctly,” he said. 

Rental fleet expansion 

Equipment rental companies also stand to benefit from full bonus depreciation, with the American Rental Association projecting the North American construction and general tool rental market to grow 5.2% in 2025 to $87.5 billion.  

Rental houses are strategizing to capitalize on the tax break as they acquire equipment to keep up with growing demand, Drew Dobson, general manager at Kersey, Pa.-based GM Equipment Rentals, told EFN. Depreciation expenses are often a significant consideration for rental companies when expanding their fleets and budgeting for the year, he added. 

“For a regional player like us, it’s a big deal,” he said. “And we talk very, very closely with our accounting team about that. … So, we were ecstatic to hear about the benefits that were coming along with the Big Beautiful Bill. It really helps a business of our size grow and be able to expand and update some fleet.” 

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