If your business is planning to purchase a new work truck, cargo van, or commercial equipment, there’s a tax benefit worth knowing about before the end of 2026.
Under Section 179 of the IRS tax code, businesses may be able to deduct up to 100% of the cost of qualifying vehicles and equipment in the year they’re put to work. Thanks to Stellar for the tip.
That could make a big difference for companies already planning to invest in their fleets.
How Does Section 179 Work?
Normally, businesses deduct the cost of expensive equipment over several years. Section 179 allows qualifying businesses to deduct some or all of that cost in the year the equipment is placed in service.
For 2026, the maximum Section 179 deduction is $2.56 million, subject to certain limits. Additional tax rules, including 100% bonus depreciation, may also allow businesses to deduct qualifying equipment costs immediately.
For example, if your company purchases a qualifying $80,000 work truck, you may be able to deduct the full $80,000 from your taxable income this year.
That doesn’t mean you save $80,000 in taxes, but it could significantly reduce your tax bill.
What Types of Vehicles Qualify?
Many commercial vehicles and equipment purchases may be eligible, including:
- Service trucks and utility bodies
- Commercial cargo vans
- Heavy-duty pickup trucks
- Mechanic trucks and crane-equipped service vehicles
- Qualifying work truck equipment and upfits
Eligibility depends on the vehicle, how it’s used, and your business’s tax situation.
Why Timing Matters
To qualify for a deduction on your 2026 taxes, the vehicle generally needs to be purchased and placed in service by December 31, 2026, assuming your business uses the calendar year for tax purposes.
Simply ordering a truck before year-end may not be enough. The vehicle needs to be ready and available for business use.
If you’re considering adding vehicles to your fleet, now is a good time to discuss the potential tax benefits with your accountant.
Planning a Work Truck Purchase?
At Pacific Truck Colors, we help Northwest businesses configure and upfit commercial trucks and vans for the work they do every day.
Whether you’re considering a service body, cargo van shelving, ladder racks, liftgates, or other commercial equipment, our team can help you explore your options.
We are not accountants or tax professionals, so talk to your accountant about whether Section 179 or bonus depreciation could benefit your business.
Additional resources: IRS Publication 946 — How to Depreciate Property | Stellar Industries — Tax Deduction Information