The Year-End Equipment Rush Has Outlived Its Tax Reason: Bonus Depreciation, Section 179, and the 2026 Year-End Deadline

Updated August 4, 2026.

There is no longer a year-end tax deadline that shrinks an equipment deduction. 100% bonus depreciation is now permanent, so buying in December instead of January no longer earns a business a higher deduction rate. December 31 only decides which tax year the write-off lands in. The rush will still happen this year, because habits outlive their reasons. For an equipment finance team, that gap is the opening of the fall: the buyers will still show up in Q4, but nothing in the tax code forces them to wait for it.

Why did everyone buy equipment in December?

Businesses bought equipment in December because Section 179 and bonus depreciation both count a purchase against the year the equipment is placed in service, and in 2023 and 2024 the bonus rate dropped every January. Budget flush and quarter-end sales pressure reinforced the same date.

Every equipment finance veteran knows the shape of the year: volume builds through fall, then December explodes. ELFA's own numbers show it. In December 2024, new business volume hit $11.4 billion, up 8.1% from November, and ELFA President and CEO Leigh Lytle called it out directly: "December is usually a strong month for new business activity with the end-of-quarter, end-of-year spike."

Three things built it:

• The tax clock: to deduct a purchase this year under Section 179 or bonus depreciation, the equipment has to be placed in service by December 31. A business having a good year had every reason to pull the trigger before the calendar flipped.
• The step-down pitch: from 2023 onward, bonus depreciation was falling on a schedule, 80% in 2023, 60% in 2024, and headed for 40% in 2025 before Congress intervened mid-year. In the fall of 2023 and 2024, every lender, dealer, and CPA in the country ran some version of the same line: buy now, because next year the deduction shrinks. That pitch worked because, at the time, it was true.
• Budget flush and quarter-end pressure: businesses spend remaining budget before it disappears, and sales teams push hardest in the last month of the last quarter. Neither of those has anything to do with the tax code.

For years, nobody needed to separate the three. They all pointed at the same month.

Is bonus depreciation 100% in 2026?

Yes, and it's staying there. Under the One Big Beautiful Bill Act, enacted in July 2025, 100% bonus depreciation is permanent for property acquired after January 19, 2025 (IRS Notice 2026-11 covers the transition rules; equipment acquired before January 20, 2025 stays on the old phase-down schedule). OBBBA also roughly doubled the Section 179 cap: a $2,560,000 deduction limit for 2026, with the phase-out starting at $4,090,000 of purchases (Rev. Proc. 2025-32).

Put that next to the old pitch. For equipment acquired after January 19, 2025, which is nearly everything moving through the pipeline now, a business that defers a purchase from December 2026 to January 2027 loses nothing in deduction rate. Not a percentage point. The only cost of deferral is timing: the deduction lands a tax year later. (The one exception: equipment still governed by a pre-January 20, 2025 acquisition sits on the old phase-down and does lose its remaining bonus percentage if delivery slips into 2027. Old contracts delivering late belong with a CPA.)

What's gone is the use-it-or-lose-it cliff that justified year-end panic buying. For a profitable business that wants the write-off against this year's income, December 31 still matters, but only as a timing line.

The urgency script the industry ran in 2023 and 2024 no longer describes the tax code. Anyone still selling "buy before the deduction shrinks" is selling something that stopped being true in the summer of 2025.

Will equipment buying still spike in December 2026?

Almost certainly yes: budget flush, fiscal year ends, and quarter-end sales pressure all remain, even though the tax step-down is gone. And a decades-old buying rhythm doesn't dissolve in the first full buying season after its tax logic disappeared. Businesses that have always evaluated equipment in Q4 will keep evaluating equipment in Q4, the same way January gym memberships survive every study about failed resolutions.

If anything, the market backdrop points to an even stronger December. Through mid-2026, ELFA's CapEx Finance Index (released July 28, 2026) shows the industry running hot: June new business volume came in at $10.5 billion, up 17.2% year over year, with credit approvals at 79.5% and ELFA forecasting a record $129 billion year.

The difference matters if you sell or finance equipment. A spike driven by habit behaves differently than a spike driven by a deadline. Deadline buyers are committed. Habit buyers can be moved.

What should equipment finance teams do differently this fall?

Retire the step-down pitch, sell delivery lead time instead of deduction rate, and move borrower conversations from December into August, September, and October.

If the tax code no longer forces the decision into December, it can happen in any month. A team that engages a borrower in September isn't fighting a tax calendar. They're just early. What to change this fall:

• Retire the step-down script: if your reps, your dealers, or your marketing are still running any version of "the deduction drops next year," fix it now. Sophisticated borrowers and their CPAs already know it's wrong, and being corrected by a customer's accountant is an expensive way to lose credibility.
• Sell lead time, not tax rate: the real deadline pressure in 2026 is production, not depreciation. Popular equipment categories carry long build and delivery queues, and a machine ordered in December may not be delivered, let alone placed in service, until well into 2027. The placed-in-service requirement hasn't changed, so a borrower who wants a 2026 deduction needs to order early enough for the equipment to actually arrive. We wrote up why the Section 179 deadline for 2026 effectively arrives before December.
• Pull your pipeline forward: if the tax code no longer concentrates decisions in December, the lender who waits for December is choosing to compete in the most crowded month for no reason. The borrower conversations that used to be December conversations can happen in August, September, and October, when fewer competitors are calling and delivery timelines still work in the borrower's favor.

Is there still a year-end deadline to buy equipment?

Yes, in one specific way: December 31 is still the placed-in-service cutoff for deducting a purchase against 2026 income for calendar-year taxpayers, which is most equipment-buying businesses. The equipment has to be delivered and in use by year end, not just ordered. That's a real deadline, and for long-lead equipment it effectively arrives months before December.

What December 31 no longer is: a cliff where the deduction itself shrinks. Miss the date and the write-off lands against 2027 income instead of 2026. It doesn't get smaller.

FAQ

Should you buy equipment before the end of the year for tax reasons?

For nearly all purchases, only for timing. Equipment placed in service by December 31, 2026 can be deducted against 2026 income. With 100% bonus depreciation permanent, waiting until January moves the deduction to the 2027 tax year without shrinking it.

Is bonus depreciation permanent now?

Yes. Under the One Big Beautiful Bill Act, 100% bonus depreciation is permanent for eligible property acquired after January 19, 2025. IRS Notice 2026-11 covers the transition rules for equipment acquired before January 20, 2025.

Did the One Big Beautiful Bill Act change Section 179?

Yes. OBBBA roughly doubled the Section 179 cap to $2.5 million, indexed for inflation, which works out to a $2,560,000 deduction limit for 2026, phasing out beginning at $4,090,000 in total equipment purchases (Rev. Proc. 2025-32). The bigger change for year-end behavior was making 100% bonus depreciation permanent, which removed the annual step-down that drove December urgency.

What is the Section 179 limit for 2026?

The Section 179 deduction limit for 2026 is $2,560,000, with the phase-out beginning at $4,090,000 of total equipment purchases, per IRS Rev. Proc. 2025-32.

Will equipment prices or availability be better in December?

Usually the opposite. December typically brings the industry's end-of-quarter, end-of-year spike in new business volume, ELFA's December 2024 index showed an 8.1% jump over November, which means heavy competition for build slots, delivery windows, and lender attention. Ordering earlier in the year typically means better delivery timing, which is what actually protects a current-year deduction.

Why does December equipment volume spike if the tax benefit is the same year-round?

Habit, budget cycles, and quarter-end sales pushes. Businesses spend remaining annual budget before it expires, and decades of tax-driven December buying built a rhythm that persists even though the tax step-down that helped create it ended.

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Alek Perak is the co-founder of Quintel, which finds equipment finance teams their next deal in public records.