On July Fourth, President Trump signed the One Big Beautiful Bill Act into law. It includes subsidies and opportunities for the marine industry. Here are three major impacts to consider this tax-planning season.

Prior to the law, companies involved in research and development in the United States were forced to capitalize those expenses over five years. These capitalization rules unjustly penalized innovations, resulting in larger tax bills for the 2022-24 tax years. For the 2022 tax year, companies were forced to add back 90% of their research and experimental expenses to their taxable income, causing situations where the tax bill differed vastly from the actual cash received from business operations for the year. 

Luckily, this provision has been removed from the law. For taxpayers with less than $31 million of average revenue during the previous three years, there is an opportunity to go back and claim refunds for the 2022-24 tax years. Even if a company did not capitalize its expenses, there can be an opportunity to claim a tax credit. Companies with more than $31 million in revenue for the previous three years can claim the capitalized amounts in full on their 2025 tax return.

The research and development tax credit is a federal tax incentive that is primarily labor-based, designed to promote innovation and growth. Additionally, 37 states offer their own R&D tax credit benefits with their own requirements and rates. The federal R&D tax credit offers a dollar-for-dollar reduction in the company’s tax bill. 

The R&D tax credit includes activities to develop new, improved and more reliable products, processes and techniques. There are many activities that marine companies perform regularly that could qualify for the R&D tax credit, such as development of new boats, engines, hardware or tooling; software development for marine-based applications or electronics; initiatives to reduce waste or emissions; and green technologies, such as electrification or other alternative fuels.

Four specific expenses can be included in the tax credit calculation, generating valuable tax savings: wages paid to employees involved in, supervising or supporting R&D activities; supplies used or consumed in the R&D activity, including prototype models; rental or lease of computers, such as cloud computing costs; and U.S.-based third-party contractors.

The R&D tax credit can be claimed on an annual basis and should be a valuable part of the long-term tax-planning strategy for companies investing in new products, processes, technologies or inventions.

Bonus Depreciation

The One Big Beautiful Bill Act also included a change to 100% bonus depreciation, which is available on assets with class lives less than 20 years. This can include trucks, trailers, equipment, machinery or even reclassified parts of real estate after performing a cost segregation study. 

The law applies to property purchased after Jan. 19, 2025. Equipment purchased between Jan. 1 and Jan. 19 would only qualify for 40% bonus depreciation. Companies looking to reduce their year-end tax burden can invest in qualifying property before the end of the year to take advantage of the additional depreciation. 

Qualified Production Property

Prior to this law, manufacturing facilities were treated no differently than any other commercial property, such as an office building or car wash. Now there is a provision allowing manufacturers to benefit from the purchase or construction of a new, qualified production property placed in service after Jan. 19, 2025. 

Buildings used as an integral part of the qualified production activity can be completely expensed in the year of purchase or construction. The law defines “qualified production property” as non-residential real property that is an integral part of the qualified production activity. 

This can include manufacturing operations (manufacturing of a tangible product except for food or beverage prepared in the same building as a retail establishment); agricultural operations; chemical production; and refining and extraction. The law does exclude the portion of the property used for offices or administrative services; lodging, parking or sales activities; and research, software development or engineering functions.

For example, let’s say a boatbuilder purchases a new property in October 2025 for $10 million, including a land value of $2 million. The building is 50,000 square feet, and 80% of the space is used for the construction of new boats. That company would receive a $6.4 million deduction in 2025. This is a fantastic planning opportunity for companies looking to expand facilities.

As with any tax-planning activity, it is important to consult a tax professional who is well-versed in these specific provisions. The steps necessary to document and substantiate these credits and deductions can be complicated, but working with the right adviser will ensure your marine business is as tax-efficient as possible. n

Michael Laur is the founder of Taxster.