Accelerated Depreciation Tax Benefits for Qualified Dry and Liquid Fertilizer Projects and Renovations Started Before 1/1/2029
If you’re planning a new dry or liquid fertilizer storage building or expansion with Stueve Construction in the next few years, there’s a tax development worth putting on your radar before you finalize your timeline. A 2025 federal tax law created a new provision that may allow you to deduct the entire cost of a qualifying fertilizer production building in its first year of service — instead of spreading that deduction out over 39 years, as has traditionally been the case. For a Stueve fertilizer facility investment of this size, that’s a meaningful difference in when you see the tax benefit, and it comes with a real deadline: construction needs to begin before January 1, 2029.
What Changed?
Under longstanding tax rules, a new dry or liquid fertilizer production building is depreciated gradually — typically over 39 years. Equipment inside the building has always been able to depreciate faster, but the building itself never has.
The One Big Beautiful Bill Act, signed into law in 2025, changed that for certain buildings. A new provision (Section 168(n) of the tax code) allows qualifying production buildings to be fully expensed in the year they’re placed in service, rather than depreciated over decades.
A simplified example: Say you’re building a $10 million fertilizer blending facility, with $2 million of that cost in equipment and $8 million in the building itself. Under the old rules, that $8 million building generates a deduction of roughly $200,000 a year, every year, for 39 years. Under the new provision, a facility that qualifies could deduct most or all of that $8 million in year one, with any unused portion carried forward. That’s a significant acceleration of a tax benefit that used to trickle in over four decades.
The Deadline That Matters: Ground Must Break Before 1/1/2029
This isn’t a permanent change — it’s a window. To qualify, construction on the building must begin before January 1, 2029. (The building itself can be completed and placed into service somewhat later than that, but the construction-start date is the hard line.) Stueve Constructions team of experts in pre construction, engineering and sales will help streamline the entire process to get your project underway.
Does Your Fertilizer Building Qualify?
This is the part that’s easy to overlook when planning for agricultural buildings: not every building is treated the same way under this provision, and the eligibility requirements can be technical in some circumstances. Because eligibility is fact-specific and the guidance is still developing, this is a question for your tax advisor, not something to determine on your own. A qualified tax professional can review your building’s design and operations and tell you where you stand.
A Note for Co-Op Members
For member-owned agricultural cooperatives, the tax benefit generally flows through to member-owners rather than being retained by the co-op itself — though exactly how that works depends on your cooperative’s specific structure. This is also worth discussing directly with your tax advisor if you’re a co-op.
Choosing the Right Builder for your Project.
To learn more about fertilizer building construction, visit www.stueve.com and explore how Stueve Construction brings proven expertise to the design and construction of dry fertilizer storage buildings, fertilizer blending facilities, and liquid fertilizer facilities.
Whether you are planning a new dry fertilizer plant, expanding an existing ag retail location, or developing a liquid fertilizer facility, Stueve Construction has the experience, engineering knowledge, and construction capabilities to help bring your project to life.
Contact Stueve Construction today to discuss your next fertilizer facility project and see how the right building partner can help you build for safety, efficiency, durability, and long-term performance.
By Dan Kerstan, CFO, Stueve Construction
This article is provided for general informational purposes only and does not constitute tax, legal, or accounting advice. Please consult your own qualified tax advisor to determine how these rules apply to your specific situation.