Outfitting a laboratory is a significant capital investment. Whether you are building a new lab, renovating an existing one, or upgrading equipment, the cost of casework, fume hoods, workstations, and instruments adds up quickly. Two federal tax provisions — Section 179 and 100% Bonus Depreciation — may allow your business to deduct the full cost of qualifying lab equipment and furniture in the year it is placed in service.
This guide explains how these deductions work, what the current limits are, and which laboratory products typically qualify.
Disclaimer: This article is for general informational purposes only and does not constitute tax, legal, or financial advice. Tax laws are complex and change frequently. Always consult a qualified tax professional or CPA to determine how these provisions apply to your specific business situation.
Section 179: Immediate Expensing for Lab Equipment
Section 179 of the Internal Revenue Code lets businesses deduct the full purchase price of qualifying equipment and property in the tax year it is purchased and placed into service. For a lab investing $100,000 in new casework and fume hoods, this means the full $100,000 could potentially be deducted in year one rather than spread across 7 years.
2026 Section 179 Limits
| Detail | 2026 Amount |
|---|---|
| Maximum Deduction | $2,560,000 |
| Phase-Out Begins At | $4,090,000 in total qualifying purchases |
| Fully Phased Out At | $6,650,000 |
| New & Used Equipment | Both qualify |
These limits were significantly expanded by the One Big Beautiful Bill Act (OBBBA) signed in 2025, raising the cap from $1.25 million to $2.5 million (adjusted annually for inflation). For 2026, the inflation-adjusted maximum is $2,560,000.
Key Requirements
- Equipment must be purchased and placed in service during the 2026 tax year (by December 31, 2026 for calendar-year taxpayers)
- Must be used more than 50% for business purposes
- The deduction cannot exceed your business’s taxable income for the year
- Both new and used equipment qualify, as long as it is new to your business
- Claim the deduction on IRS Form 4562
100% Bonus Depreciation: Permanent Full Expensing
Bonus depreciation under Section 168(k) allows businesses to deduct 100% of the cost of qualifying assets in year one. The One Big Beautiful Bill Act permanently restored 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025.
How Bonus Depreciation Complements Section 179
| Feature | Section 179 | 100% Bonus Depreciation |
|---|---|---|
| Dollar Limit | $2,560,000 (2026) | No limit |
| Income Limitation | Cannot exceed taxable income | Can create a net operating loss |
| New/Used Equipment | Both qualify | Both qualify |
| Property Type | Tangible personal property | MACRS property ≤20 years |
| Filed On | IRS Form 4562 | IRS Form 4562 |
For large lab projects, you can apply Section 179 first and then use bonus depreciation on any remaining cost. The two provisions together can cover the full price of a complete lab build-out in a single year.
What Laboratory Products May Qualify?
Most tangible personal property purchased for business use in a laboratory qualifies. Under MACRS, lab furniture and fixtures are generally classified as 7-year property, and some lab equipment may be classified as 5-year property. With Section 179 or bonus depreciation, you can deduct the full cost in year one.
Lab Furniture and Casework
- Lab casework — steel, stainless steel, wood, and phenolic cabinets
- Work surfaces and countertops — epoxy resin, phenolic, and stainless steel
- Laboratory workstations and benches
- Lab tables — adjustable and fixed, including Patriot tables
- Sink cabinets and laboratory sinks
- Lab storage cabinets
*Note on casework classification: Lab casework — whether steel, stainless, wood, or phenolic — is generally classified as tangible personal property (furniture and fixtures) rather than a structural building component, as long as it is not permanently affixed to the building.
Fume Hoods and Ventilation Equipment
- Fume hoods — ducted, ductless, bench-top, walk-in, and specialty hoods
- Exhaust snorkels
- Laminar flow hoods
- Glovebox fume hoods
Storage and Shelving
- Laboratory shelving systems — wall-mount and bench-mount
- Safety cabinets for chemicals and flammables
- Mobile shelving systems
Lab Equipment and Instruments
- Centrifuges and analytical instruments
- Lab water purification systems
- Pipettes and lab instruments
- Washers, incubators, ovens, and water baths
- Autoclaves and sterilization equipment
Lab Seating and Safety Equipment
- Lab chairs and ergonomic seating
- Emergency equipment — eyewash stations, safety showers
- Lab fittings and faucets
De Minimis Safe Harbor: Deducting Smaller Lab Items
For smaller lab purchases, the IRS de minimis safe harbor allows businesses to immediately expense items costing $2,500 or less per invoice or item ($5,000 if your business has audited financial statements). There is no limit on the number of qualifying items per year.
Example: Tax Savings on a Lab Build-Out
Consider a pharmaceutical company that purchases $175,000 in lab casework, fume hoods, and workstations in 2026:
| Approach | Year 1 Deduction | Estimated Tax Savings* |
|---|---|---|
| Standard MACRS depreciation (7 years) | ~$25,000 | ~$5,250–$7,500 |
| Section 179 or Bonus Depreciation | $175,000 | ~$36,750–$52,500 |
*Estimated savings assume a 21%–30% effective tax rate. Actual savings depend on your entity type, tax bracket, and overall tax situation.
Who Benefits Most?
- Research laboratories upgrading or expanding facilities
- Universities and K–12 schools building or renovating science labs
- Pharmaceutical and biotech companies outfitting new labs
- Healthcare organizations adding clinical, pathology, or diagnostic labs
- Manufacturing companies with quality control and testing labs
- Government and military facilities investing in lab infrastructure
- Food science and nutrition labs
How to Claim These Deductions
- Purchase qualifying lab equipment and furniture
- Install and place in service before December 31, 2026
- Document everything — keep invoices, delivery/installation records, and proof of business use
- File IRS Form 4562 with your business tax return
- Work with a qualified tax professional
Frequently Asked Questions
Do fume hoods qualify for Section 179?
Fume hoods are generally considered tangible personal property. As long as they are purchased and placed in service during the tax year and used more than 50% for business, they typically qualify. Confirm with your tax advisor.
Does lab casework qualify?
Lab casework is generally classified as furniture and fixtures (tangible personal property), not a structural component. It typically qualifies for Section 179 and bonus depreciation. A cost segregation study can confirm classification.
Do both new and used equipment qualify?
Yes. Both provisions apply to new and used equipment, as long as the property is new to your business.
What if I finance the equipment?
You can still deduct the full purchase price even if financed.
Free Lab Design Consultation
Labs USA provides free lab design services, project management, and installation for laboratories of all sizes. Our furniture specialists can plan your layout and coordinate delivery so your equipment is in service before the year-end tax deadline.
📞 801-855-8560 | ✉️ Sales@Labs-USA.com
Always consult a qualified tax professional to determine eligibility and maximize your deductions.