Architectural millwork and casework margins are tight, lead times are demanding, and equipment investments are capital-intensive. The OBBB tilts the playing field in your favor by:

• Reducing the after-tax cost of CNC machinery, edge banders, finishing systems, dust collection, and production automation

• Improving cashflow on R&D like shop optimization, software automation, or custom fixture development

• Lowering tax rates permanently for many privately held shops

• Making major plant expansions significantly cheaper

• Increasing incentives to keep production in the U.S.

If you’ve been considering a new CNC router, edge bander, beam saw, dowel inserter, finishing line, or an entire shop expansion, OBBB is effectively a government-funded coupon book.

1. 100% Bonus Depreciation on Shop Equipment (After Jan 19, 2025)

What It Means for Millwork Shops

Every major equipment purchase—
CNC routers, edge banders, panel saws, automated case clamps, sanding systems, finishing booths, compressor upgrades, material handling, lighting improvements—
is now eligible for 100% first-year bonus depreciation, permanently.

Effective Dates

• Assets acquired & placed in service after Jan 19, 2025 → 100% write-off

• No scheduled phase-down

Why It Matters

This is the single largest tax incentive for woodworking manufacturers in 20 years. A $250,000 CNC machine can effectively reduce your tax bill by the entire $250,000 in Year 1.

2. 100% Deduction for New Production Areas (2025–2030 Window)

OBBB creates a new category called Qualified Production Property (QPP)—and architectural millwork facilities qualify.

This allows a 100% deduction for NEW or EXPANDED:

• Shop floors

• Production bays

• Machine rooms

• Assembly areas

• Finishing areas

• Racking & material-handling corridors

Excluded areas: offices, conference rooms, admin, sales, and parking.

Construction Timing Requirements

To qualify, a project must:

• Start construction after Jan 19, 2025 and before Jan 1, 2029

• Be placed in service after July 4, 2025 and before Jan 1, 2031

Translation for Millwork Firms

If you’ve been considering adding a second CNC cell, expanding your finishing department, or building a new freestanding production building, the OBBB massively lowers the net cost.

3. Section 179 Expensing Limits Doubled (2025+ Years)

New Limits

• $2.5M immediate expensing

• Phase-out starts at $4M

• Full phase-out at $6.5M

What This Means for Shops

Smaller and mid-sized millwork companies can now expense far more machinery without touching bonus depreciation. This can be a powerful strategy when balancing taxable income year-to-year.

4. 100% Domestic R&D Expensing (2025+)

Architectural millwork manufacturers do far more R&D than they realize:

• Process optimization

• New cabinet construction methods

• Custom jigs/fixtures

• CNC programming development

• ERP or CAD/CAM workflow automation

• Engineering prototypes for commercial jobs

OBBB Restores Full Immediate Expensing

• Applies to tax years after Dec 31, 2024

• Foreign R&D still amortized, but domestic shop-floor R&D is expensed 100%

Bonus: Retroactive Relief

Small manufacturers (<$31M average receipts) can amend 2022–2024 to reclaim cash.

5. Interest Deduction Expanded (EBITDA Rule Returns)

If you finance machines or facility expansions, this matters.

What Changed

The interest-deduction limit is now based on EBITDA, not EBIT.
This increases the amount of deductible interest on:

• CNC financing

• Equipment packages

• Commercial real estate loans

• Expansion loans

• Working capital credit lines

Effective Date

• Tax years after Dec 31, 2024

6. Pass-Through Millwork Shops: QBI Deduction Made Permanent

If your shop operates as an S-Corp, Partnership, or LLC, this is huge:

• The 20% QBI deduction (Section 199A) is now permanent.

Effect

A shop owner in the top bracket sees their effective rate drop from 37% → 29.6% on qualified business income.

Effective Date

• Continues uninterrupted starting 2026 (no sunset)

7. Semiconductor/Advanced Manufacturing Credit — Indirect but Real

While meant for chip fabs, the ripple effect increases U.S. demand for precision millwork in:

• Controlled-environment labs

• Toolrooms

• Semiconductor facilities

• Custom casework for cleanrooms and testing environments

Credit Increase

• From 25% → 35%, starting after Dec 31, 2025

This indirectly boosts millwork contractors serving tech, medical, and advanced manufacturing clients.

8. Estate & Succession Relief for Family-Owned Shops

New Exemption

• $15M / individual

• $30M / married couple

Effective 2026 onward.

This allows family millwork businesses to transition ownership without crippling estate taxes.

9. QSBS Enhancement (Stock Acquired After July 4, 2025)

This matters if your shop is a C-Corp planning growth or sale.

• Expanded tax-free gain treatment under Section 1202

• Could eliminate tax on sale of qualifying manufacturing businesses

10. Auto-Loan Interest Exclusion for U.S.-Made Vehicles

Indirect but relevant:
Driving U.S.-made work trucks and vans becomes more tax-efficient, increasing fleet purchasing leverage for millwork installers and delivery teams.

What Millwork Shops Should Do NOW (2025–2026 Playbook)

1. Front-load equipment purchases (100% bonus applies NOW)

Upgrade CNC capacity, edge banding, finishing, or automation while the tax code is maximally favorable.

2. Start facility expansions before 2029

New production space gets 100% deducted if properly timed.

3. Capture your R&D — it’s worth real money

Document CNC process development, fixture creation, CAD/CAM workflows, etc.

4. Revisit your entity structure

Pass-throughs receive major permanent benefits.

5. Consider succession planning early

Estate exemption increases deliver massive long-term advantages.

Need Help Automating Your Architectural Millwork Shop?

Centex Automation helps North American millwork and cabinetry manufacturers implement:

• CNC router automation

• Robotic panel handling

• Automated finishing systems

• Production cell optimization

• Workflow engineering

• ERP/CAD/CAM integration

Whether you’re planning an equipment upgrade or a full production redesign, OBBB incentives can reduce your effective cost by 25–50% or more.

Schedule a consultation:

👉 https://www.centexautomation.net/pages/contact

Final Word

The OBBB transforms the economics of architectural millwork and cabinetry manufacturing. Shops that proactively leverage these incentives will gain a competitive advantage in:

• Cost per box

• Lead time

• Capacity

• Profit margin

• Long-term viability

Centex Automation is here to help you use the bill to its fullest advantage—and build the most efficient, profitable millwork operation possible.