On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. For transportation and logistics companies, this legislation presents both opportunities and challenges. From shifts in energy policy to major tax deductions, understanding the implications and what to do next is critical for strategic planning and financial health.
1. Energy Credit Changes
One of the most immediate changes for transportation companies is the rollback of electric vehicle (EV) tax credits. The repeal of EV tax credits after September 30, 2025 could significantly impact companies that have invested in or are planning to transition to electric fleets. For businesses that have already committed to EVs, the loss of federal support may strain budgets and alter long-term sustainability strategies, while those planning future transitions must act quickly to capitalize on remaining incentives before they disappear.
In contrast, the bill promotes domestic oil and gas production while eliminating many clean energy subsidies. This shift may lead to short-term reductions in diesel fuel costs, offering some relief to traditional fleet operators, but the rollback of clean energy incentives introduces long-term uncertainty for companies to plan for alternative energy solutions.
2. 100% Bonus Depreciation
OBBBA brings several favorable tax changes for transportation and logistics companies. Notably, the reinstatement of 100% bonus depreciation for eligible property placed in service after January 19, 2025, allows businesses to fully deduct the cost of trucks, trailers, forklifts and handling equipment, machinery, and other equipment in the year of purchase. This provision is a powerful tool for improving cash flow and encouraging capital investment.
3. Section 179 Deduction
In addition, the bill introduced an expanded §179 deduction, which increases the maximum deduction from $1 million to $2.5 million, with the phase-out threshold raised to $4 million. This can support enhancements in technology, automation, and facility upgrades, which are critical areas for logistics companies looking to scale efficiently.
4. 163j Interest Expense Deduction
OBBBA also adjusted the interest expense deduction under Internal Revenue Code §163(j), which will now allow deductions based on 30% of earnings before interest, taxes, depreciation, and amortization (EBITDA) rather than EBIT, which could have significant tax implications for transportation and logistics companies that have a considerable amount of debt-financed equipment. This change benefits capital-intensive businesses, such as those with large fleets or material handling equipment financed through debt by increasing the amount of deductible interest.
5. Qualified Business Income Deduction for PTEs
The final high-impact item for transportation and logistics companies, at least within the scope of this article, is for those structured as pass-through entities (PTEs). OBBBA brings the permanent extension of the 20% qualified business income (QBI) deduction, effective for tax years beginning after December 31, 2025. This provides long-term tax planning for partnerships and S corporations, which are common structures in the transportation and logistics industry.
Similarly, OBBBA maintains the availability of state-level PTE tax workarounds, allowing businesses to reduce federal taxable income by electing to pay state taxes at the entity level. This remains a valuable strategy for tax optimization.
How Can Transportation & Logistics Companies Plan Moving Forward?
Transportation and logistics companies should begin by reviewing their current and planned EV investments with the credit repeal deadline approaching and, if they are committed to their current clean energy strategy, consider accelerating any purchases. Businesses should also explore capital expenditure needs to take full advantage of bonus depreciation and expanded §179 limits. Consider financing and organizational structures to enhance interest deductions under the new EBITDA-based rule.
From a financial perspective, transportation and logistics companies can expect enhanced deductions in 2025 and beyond, which can result in improved short-term cash flow. The permanence of QBI and bonus depreciation provisions will simplify long-term tax planning. However, companies must also prepare for potential volatility in fuel costs and revisit long-term energy strategies.
How Forvis Mazars Can Help
Our Transportation & Logistics Practice has extensive experience in the industry, offering deep knowledge and specialized tax experience. We understand the operational and financial aspects of the industry and offer tailored guidance to help you understand the nuances of deductions and credits and identify a strategy that makes sense for your organization. We offer services to help with entity structuring and long-term tax planning. We’re here to help you navigate the complexities of OBBBA and turn legislative change into strategic advantage. For more information, please reach out to a professional at Forvis Mazars.