You make things. You sell things. The government will pay for your building.
A provision in the One Big Beautiful Bill Act lets small-scale manufacturers write off 100% of a new production building — not just equipment, the building itself. Most makers don't know it exists.
Based on IRC §168(n) — Qualified Production Property provisions of the OBBBA, signed July 4, 2025.
Construction must begin by Dec 31, 2028 · In service by Dec 31, 2030
What kind of products do you make?
Where do you currently produce?
Based on IRC §168(n) — Qualified Production Property provisions of the One Big Beautiful Bill Act, signed July 4, 2025. This calculator provides estimates for informational purposes only and does not constitute tax advice. Consult a qualified tax professional.
What Most Makers Get Wrong About Workshop Deductions
If you make physical products and sell them — whether on Etsy, Amazon, Shopify, at craft fairs, or wholesale — you're a manufacturer in the eyes of the tax code. But most makers don't think of themselves that way, and neither do most general-practice CPAs.
Here's what typically happens: You outgrow your garage. You convert a spare bedroom into a studio. At tax time, your accountant applies the home office deduction — $5 per square foot, up to 300 square feet. Maximum deduction: $1,500.
That's fine for a desk job. But you're not doing a desk job. You're running heat presses, kilns, table saws, CNC routers, and laser cutters. The One Big Beautiful Bill Act, signed into law on July 4, 2025, changed the math dramatically.
The Production Building Deduction Explained (In Plain English)
If you build a building that you use to make things, you can deduct the entire cost of that building in the year you start using it.
Not over 39 years. Not 50% this year and 50% next year. One hundred percent. Year one. The concrete slab, framing, walls, roof, HVAC, plumbing, electrical, insulation — all deductible in year one.
What's NOT included: The land itself, and any portion used for residential purposes.
What's also deductible, separately: Your equipment — heat presses, kilns, CNC machines — qualifies for 100% bonus depreciation under a different provision permanently restored by the same law.
Who Qualifies?
- You make physical products. Sublimation, woodworking, ceramics, screen printing, metalwork, food production, sewing, CNC, 3D printing.
- You sell what you make. Through any channel.
- The building is used primarily for production.
- You own or will own the property.
- Construction begins by December 31, 2028.
- Building in service by December 31, 2030.
The Math That Changes Everything
Sarah makes custom tumblers. She sells $90,000/year on Etsy. She builds a 1,000-square-foot detached workshop for $120,000.
Under the old rules: Depreciate over 39 years = ~$3,077/year.
Under the production building deduction: $120,000 in year one. At ~22% effective rate, that's roughly $26,400 in tax savings. The excess creates a Net Operating Loss carrying forward for additional savings.
Total estimated tax benefit over 2–3 years: $33,000–$38,000.
The Deadline Is Real
Construction must begin by December 31, 2028 (physical work starts, or 10%+ cost incurred). Building must be in service by December 31, 2030. A typical workshop build takes 4–8 months. Add planning and permits, and you need to start the process 12–18 months before completion.
Why Your Regular CPA Might Miss This
Most small business CPAs are generalists. The production building deduction sits in a section of the code most generalist preparers never encounter. That's why we connect you with CPAs who specifically work with manufacturers and production businesses.
Already Thinking About Where to Build?
Some counties have no zoning restrictions — build a workshop without permits. Property taxes vary dramatically. We've scored 3,500+ US counties on buildability factors.
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Read our complete guide: What home-based makers can deduct in 2026 →