Section 179 for Commercial Vehicles: Your 2025 Year-End Guide (New Mexico)
Disclaimer: Information about Section 179 is shared for educational purposes only and should not be considered tax, legal, or accounting advice. Chalmers Ford recommends all business purchasers consult their tax professional regarding eligibility and deductions
Quick summary: Section 179 may allow many New Mexico businesses to deduct all or part of the purchase price of eligible commercial vehicles placed in service by December 31, 2025. Bonus depreciation may further accelerate deductions depending on your facts and the law in effect. We’ll coordinate vehicle availability, upfit timelines, and documentation so your units are in service on time—then you and your CPA can determine your best approach.
2025 Numbers (at a glance)
Important Note on 2025 Figures: The Section 179 limits and luxury auto caps referenced in this guide are projections based on expected inflation adjustments for 2025. Final figures are subject to official IRS publication, which may slightly differ.
| Item | 2025 Reference Amount | What It Means |
|---|---|---|
| Section 179 Maximum Deduction | $2,500,000 | Potential first-year deduction for qualifying business property placed in service by 12/31/2025. |
| Section 179 Spending Cap (phase-out threshold) | $4,000,000 | Deduction phases out dollar-for-dollar above this total equipment spend. |
| Heavy Vehicle Cap (Section 179) | $31,300 | Maximum Section 179 expensing for certain vehicles over 6,000 lbs. GVWR in 2025. |
| Bonus Depreciation | 40% for property placed in service Jan 1–Jan 19, 2025; 100% for qualified property placed in service after Jan 19, 2025 | Additional first-year depreciation that may apply after Section 179; confirm eligibility, special elections, and timing with your CPA. |
What Is Section 179?
Section 179 is a U.S. tax provision that may let businesses deduct all or part of the purchase price of qualifying property—like many commercial vehicles—in the year the asset is placed in service. Your eligibility depends on entity type, business-use percentage, and current-year limits. Work with your CPA to determine the best approach for your operation.
Do Your Vehicles Qualify?
- Business use & placed in service: The vehicle must be delivered, titled/registered as needed, and actively used for business by 12/31/2025.
- Weight/GVWR: Heavier vehicles (e.g., some vans, chassis cabs, and pickups) may allow larger first-year deductions; SUVs can be subject to a separate cap.
- New or used: Both can qualify if they’re new to you (not previously owned by your business).
- Upfits: Certain installed upfits (bodies, racks, lighting) may count; coordinate lead times so units arrive job-ready.
Placed-in-Service Checklist
- Signed purchase docs & proof of delivery date
- Title/registration (if applicable prior to use)
- Mileage log or telematics set-up
- Upfit invoices & installation dates
- Photograph or record of first business use
Real-World Examples (Simplified)
Disclaimer: Information about Section 179 is shared for educational purposes only and should not be considered tax, legal, or accounting advice. Chalmers Ford recommends all business purchasers consult their tax professional regarding eligibility and deductions
- Service Van with Shelving: Deduct a substantial portion in year one via Section 179; use bonus depreciation if applicable for the remainder.
- Fleet of Light-Duty Pickups: Spread deductions across units; watch the Section 179 spending cap and stacking with bonus depreciation.
- Chassis Cab with Body Upfit: Coordinate build + upfit schedules so the vehicle is delivered and in business use before year-end.
Need vehicles now? Shop in-stock options to improve the odds of hitting the placed-in-service deadline—and coordinate upfits early.
Bonus Depreciation vs. Section 179
Many businesses combine Section 179 and bonus depreciation. Section 179 can reduce taxable income first (subject to limits and income), then bonus depreciation may apply to remaining basis depending on the law in effect for 2025. Some taxpayers may elect alternative percentages in limited cases—work with your CPA to choose the right path for your situation.
Compliance note: Laws and thresholds can change. Heavy-vehicle caps, bonus depreciation percentages, and income limitations may update annually. Confirm current numbers with your CPA before filing.
Financing, Cash Flow & Records
- Cash vs. finance: Deductions generally track business use and placed-in-service timing—not whether you paid cash.
- Substantiation: Keep purchase docs, upfit invoices, mileage logs, and in-service proof.
- Local operations: For Rio Rancho, Albuquerque, and East Mountains routes, consider uptime planning—our Mobile Service can reduce downtime.
Disclaimer: This page is for general information only and is not tax, legal, or accounting advice. Eligibility and deductions depend on your specific situation. Always consult a qualified tax professional.
FAQs: Section 179 for New Mexico Businesses
Do commercial vehicles have to be placed in service by December 31?
Yes—generally the vehicle must be delivered and used in your business by the end of your tax year (often December 31) to claim Section 179 for that year. Your CPA can confirm your specific deadlines.
Can used vehicles qualify for Section 179?
Often yes, if they’re new to your business and otherwise eligible. Prior ownership by your company can affect eligibility. Ask your CPA for confirmation.
How do GVWR and heavy-vehicle caps impact my deduction?
Vehicle weight and classification can change the maximum first-year deduction and whether a special cap applies. Check each model’s GVWR and confirm limits with your tax advisor.
Should I use Section 179 or bonus depreciation first?
Many businesses use Section 179 first (subject to limits) and bonus depreciation next. The optimal order depends on current law and your income; your CPA can advise.
Can upfits count toward Section 179?
Certain installed upfits may qualify. Coordinate build and installation so the unit is delivered and in business use before your year-end.
Plan your year-end purchase in 15 minutes. We’ll verify availability, upfit timing, and documentation to help you meet placed-in-service requirements.
Talk to our Fleet Team: mmichnuk@chalmersford.com | 505-890-2116