The following is a guest post from Dean Quiambao, partner at Armanino. Opinions are the author’s own.
Legacy systems aren’t built for the AI era. CFOs recognize the potential applications of AI-enhanced systems, but budgets are tight, and tax laws have made it challenging to implement the kind of modernization most companies require. But that changed on July 4, when President Trump signed the “One Big Beautiful Bill” Act into law.
The comprehensive tax and spending bill brings back 100% bonus depreciation, expands Section 179 expensing limits and reverses the amortization requirement for domestic R&D. The result is a dramatically improved return on investment for AI enablement. Companies can now deduct domestic R&D spend in the year it incurred. Hardware tied to AI projects is fully deductible again. Even internal initiatives, like upgrading enterprise software systems or customizing digital workflows, now have favorable treatment under the new rules. For the first time in years, the tax code and the tech roadmap are aligned.
This matters because operational hurdles tend to be the biggest stumbling blocks to AI implementation, in my experience. Too many businesses run on infrastructure that was never designed to support machine learning, intelligent automation or advanced data modeling. And while finance teams may understand the strategic value of transformation, they’ve lacked the budget flexibility to prioritize it. As a CFO, have you ever debated whether to move off a legacy ERP platform or upgrade server infrastructure and struggled to build a financial case for it? Now is the time to act.
What’s different now is the immediacy of the benefit. Previously, investments in software development or AI implementation had to be capitalized and amortized over multiple years. That meant companies were front-loading their costs but only seeing the tax benefit trickle in. The restoration of full deductibility for domestic R&D means that if you’re building internal AI capabilities, training digital workers or developing proprietary automation, you can write those expenses off in real time. That changes the cash flow story.
We’re also seeing a resurgence in hardware investment. With bonus depreciation back at 100%, companies have more incentive to upgrade on-prem systems, invest in Internet of Things devices or access physical infrastructure that supports their data strategy. Even if you’re working with third-party partners or colocated data centers, these investments are now easier to justify financially.
And for companies that need to retrain employees or reorganize workflows as part of their AI rollout, many states offer additional incentives. Georgia, for example, has a retraining tax credit program. California and New Jersey have similar mechanisms that stack on top of the federal rules.
The bottom line is your AI road map may look the same as it did before July 4, but your ability to fund it just improved dramatically. And that’s important, because delaying transformation compounds what I call “tax-anchored tech debt.” You’re already sinking costs into systems that can’t scale. If you don’t deduct those costs now, you’re falling behind both technologically and financially.
Of course, the tax tail shouldn’t wag the strategic dog. You shouldn’t invest in AI just because it’s deductible. But if you’re already thinking about how to scale automation or build smarter infrastructure, there’s never been a better time to act.
No one knows how long this window will stay open. Policies shift, incentives expire and economic priorities evolve. But right now, the alignment between tax law and digital strategy is unusually clear. If you’ve been waiting for the right moment to modernize, this is it. Don’t let it pass.
