Big Tax Savings in 2025: What the OBBBA Means for Drilling Rig Owners
2025 has brought a major win for drilling businesses across the country. With the passage of the One Big Beautiful Bill Act (OBBBA) in July 2025, companies investing in new equipment—like water well drilling rigs—can take advantage of significant tax incentives that make purchasing easier than ever.
Under the OBBBA, 100% bonus depreciation has been permanently restored. This means drilling companies can now write off the entire cost of a qualifying rig in the first year it’s placed in service.
Key details:
Applies to both new and used qualifying equipment.
Rigs must be acquired and placed in service after January 19, 2025.
Water well drilling rigs qualify as heavy machinery (20-year recovery period).
In short: if you buy a rig this year, you can deduct the entire cost up front instead of spreading it out over time.
Section 179 Deduction: Even More Flexibility
In addition to bonus depreciation, the Section 179 deduction offers another way to expense qualifying equipment. For 2025, the limit has been increased to $2.5 million, with a phase-out beginning once total purchases exceed $4 million.
Section 179 is especially useful for:
Smaller equipment purchases.
Businesses looking to manage taxable income more strategically.
Companies that want the flexibility to choose which assets to expense.
How to Take Advantage
Buying a drilling rig is a major investment, but these tax changes make 2025 an excellent time to act. The ability to fully expense a rig in the first year frees up cash flow, lowers taxable income, and helps businesses reinvest faster. Your accountant or tax advisor can help you decide the best strategy for your business to save on these investments.
At Versa-Drill, we’re committed to helping our customers get the most out of their investments—both in the field and on the balance sheet. With these new tax incentives, there’s never been a better time to put a new rig to work. If you’ve been considering upgrading or expanding your fleet, now is the perfect time.
Contact Versa-Drill today to explore our rig options, discuss financing, and take advantage of the 2025 tax incentives.
Your next investment could pay for itself faster than you think.
Check out our full line of water well drilling rigs to see which drill rig is right for you. Reach out to us today to learn more.