How New 2025 Tax Legislation Impacts Machinery Deductions for Arizona Manufacturers
If your business runs on compressed air, there’s good news. A new tax law was passed this year that makes it easier to write off the full cost of equipment, such as compressors and air systems. That means it’s a great time to replace, upgrade, or invest in a new compressor or air system for your business.
Arizona Pneumatic is ready to help. Contact our sales representatives today to discuss how we can help you with new machinery that will improve the operations and output of your business. Act now to take advantage of this new federal tax bill.
100% Bonus Depreciation
One of the biggest takeaways from the new legislation is the return of 100% bonus depreciation for qualifying equipment purchases made after January 19, 2025. This gives businesses the ability to:
- Deduct the full cost of qualifying machinery and equipment in the same year it’s purchased
- Avoid waiting years to write off the full amount
- Keep more money on hand to reinvest in other aspects of your business
What Equipment Qualifies?
This tax incentive covers:
- Machinery and equipment with a class life of 20 years or less
- Certain improvements to nonresidential property
- Both new and used equipment, as long as it’s new to your business
If your operation relies on compressed air systems, like the ones we offer at Arizona Pneumatic, this legislation benefits you.
Better Air Treatment Systems, Cleaner Results
Air quality was another issue. Their old dryer was undersized and couldn’t maintain a consistent dew point, which caused problems downstream. It was replaced with a high-ambient cycling dryer that now keeps the system within ISO 8573-1 Class 4 standards all year.
They also upgraded their oil-water separator. The old setup risked discharge violations. With the new equipment in place, this is no longer a concern.
Arizona-Specific Tax Savings
Arizona already gives manufacturers a tax incentives, and this new federal legislation makes things even more beneficial.
Sales Tax Exemption on Manufacturing Equipment
Arizona Revised Statutes § 42-5159(B)(1) provides a sales tax exemption for machinery and equipment used directly in manufacturing. This means if you buy qualifying equipment from a supplier like Arizona Pneumatic, you may be exempt from paying sales tax on that purchase.
Transaction Privilege Tax (TPT) Deductions
Arizona also allows TPT deductions for equipment used in commercial mining or manufacturing processes.
What This Means for Arizona Pneumatic Customers
If you’re thinking about upgrading your equipment in 2025, here’s what to keep in mind:
- Immediate Tax Benefits: You can deduct 100% of your qualifying machinery purchases this year.
- Lower Sales Tax Burden: Arizona-based purchases may qualify for additional exemptions.
- Smarter Equipment Investment: Whether you’re buying a new compressed air system or retrofitting your existing setup, the right equipment pays off even faster.
Arizona Pneumatic helps manufacturers, medical suppliers, defense contractors, and other businesses get more out of their equipment with reliable compressed air systems and complete air treatment solutions. With the new tax changes in play, it’s a smart time to think about upgrading.
Ready to Make the Most of Your Investment?
We’ll help you cut waste, stay in compliance, and get more life out of your equipment.
Call us at (520) 645-8947 or contact us online to get started.