How Modular Wiring and Prefab Buildings Can Help You Save on Taxes with Section 179 and Bonus Depreciation

Unlock Immediate Tax Savings on Your Facility Upgrades 

For businesses planning capital investments in facility improvement, the newly enacted One Big Beautiful Bill Act (OBBBA) offers a significant financial opportunity. The law reverses the scheduled phase-down of accelerated depreciation, ensuring that 100% Bonus Depreciation is fully restored for qualifying investments. Additionally, Section 179 has expanded, meaning that companies investing in adaptable assets—like modular wiring systems and modular wiring construction—can potentially expense the entire cost of their purchases in the first year they're placed in service. 

This guide explains the changes in the OBBBA and details why modular products are uniquely positioned to deliver immediate cash flow advantages through accelerated expensing. 

Decoding the OBBBA Depreciation Reset 

The OBBBA provides a dual advantage for 2025 capital planning: 

1. Permanent 100% Bonus Depreciation: The previous law had scheduled bonus depreciation to drop to 40% in 2025. The OBBBA eliminates this phase-down, stabilizing the rate at 100% for qualifying tangible property placed in service after January 19, 2025. 

2. Expanded Section 179 Expensing Limits: The cap on immediate expensing under Section 179 has nearly doubled, increasing the maximum deduction to $2.5 million and raising the phase-out threshold to $4.0 million. This makes these powerful immediate write-offs accessible to businesses spending up to $6.5 million annually on equipment. 

   
   

In some cases, it’s possible to combine Section 179 (up to $2.5 million) and the restored 100% Bonus Depreciation, enabling companies to achieve full cost expensing in the year of acquisition. 

The Critical Tax Advantage: Tangible Personal Property (TPP) 

The key to unlocking 100% accelerated depreciation is asset classification. Traditional stick-built buildings are designated as permanent fixtures (Real Property), requiring depreciation over a 39-year period. 

Modular structures and wiring systems, on the other hand, may be classified as Tangible Personal Property (TPP). TPP includes equipment and movable fixtures that have a shorter useful life, typically 5 or 7 years. Modular products often qualify as TPP because they are designed to be demountable, portable, and readily removed without damaging an existing building’s structure. This non-permanence can allow the entire cost to be expensed in Year 1, accelerating capital recovery by decades. 

Power Built: Immediate Expensing for Modular Wiring 

Power Built modular wiring systems—which are ideal for high-bay, under-mezzanine, and prefabricated structure lighting—generally qualify as 5-year MACRS property.

While most electrical infrastructure is classified as Real Property, tax rules permit specialized electrical components, particularly those integral to manufacturing or operational equipment, to be classified as shorter-lived TPP. By providing modular and highly adaptable wiring, Power Built’s systems can function as specialized equipment, not merely general building wiring. Additionally, the "plug and play" nature of these systems, which allows them to be unplugged, reused, and relocated to another building without damaging the asset or host structure, reinforces their classification as Tangible Personal Property. 

This immediate expensing capability is a welcome boon to facility modernization, empowering businesses to stack the substantial cost-recovery benefit of 100% depreciation on top of the operational ROI of energy-efficient systems (like LED lighting upgrades). The resulting financial return for lighting and wiring modernization is now immediate and maximized. 

Panel Built: Accelerating the Modular Building ROI 

Panel Built, Power Built’s sister company, manufactures modular mezzanines, offices, guard shacks, and equipment enclosures that can qualify as 7-year MACRS TPP. This classification is critical because their demountable and panelized design is recognized as movable equipment, allowing purchasers of these prefabricated structures to take advantage of 100% accelerated expensing. This dramatically reduces the capital recovery schedule from 39 years for conventional construction to a single year—which results in both immediate tax savings and a strong financial incentive to choose modular construction for expansion or relocation needs. 

Ask Your Tax Professional How You Can Benefit 

The specific applications of Section 179 and 100% Bonus Depreciation depend on your unique business circumstances, total capital expenditures, and property installation methods. To ensure you’re in compliance with tax codes, we suggest reaching out soon to a qualified tax professional that can help your business verify eligibility and ensure optimal tax planning. 

Resource: IRS Publication 946, How To Depreciate Property 

If you’d like to learn more about modular wiring and buildings, please reach out to us at 877-835-7219 or info@pbwiring.com.