USCC Comments on Notice 2026-16
Published
April 22, 2026
April 21, 2026
The Honorable Kenneth J. Kies
Assistant Secretary (Tax Policy)
U.S. Department of the Treasury
1500 Pennsylvania Avenue N.W., Room 3120
Washington, D.C. 20220
Re: Interim Guidance on Special Depreciation Allowance for Qualified Production Property (Notice 2026-16)
Dear Mr. Kies:
On behalf of the U.S. Chamber of Commerce (“Chamber”), I am pleased to submit the enclosed comments on the interim guidance provided in Notice 2026-16[1] concerning the new special depreciation allowance for qualified production property under section 168(n) of the Internal Revenue Code.[2] Added to the Code last year by the One Big Beautiful Bill Act (“OBBBA”),[3] section 168(n) temporarily allows businesses the election to fully and immediately expense certain nonresidential property used in manufacturing, agricultural production, chemical production, or refining and placed in service after July 4, 2025.
The Chamber commends the Department of Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) for prioritizing the release of interim guidance on this important new incentive, which Congress intended to strengthen U.S. industrial capacity, promote capital investment and modernization, and facilitate job creation.[4] Because section 168(n) is new, businesses have been reluctant to apply it in navigating major capital investment decisions without any guidance to validate its availability. In this regard, the interim guidance set forth in Notice 2026-26 offers welcome, actionable clarity for many businesses contemplating the use of this significant cost-recovery benefit.
As requested in Notice 2026-16, the enclosed comments identify a range of issues on which businesses seek additional guidance in the forthcoming proposed regulations. They also incorporate constructive feedback from our member companies regarding certain definitions and other rules described in the notice that warrant clarification or modification, consistent with congressional intent. Properly implemented, section 168(n) has the potential to spur substantial near-term capital investments that will support sustained economic growth for years to come.[5] The enclosed comments offer sound, practical recommendations to help Treasury and the IRS realize this potential.
The Chamber appreciates the opportunity to weigh in at this formative stage in section 168(n)’s implementation, and we encourage Treasury and the IRS to remain engaged with the business community in drafting the proposed regulations. As always, we would welcome the opportunity to discuss our comments with you or your colleagues in further detail and provide any additional information you may require. Please contact Sarah Corrigan, the Chamber’s Tax Counsel, at (202) 680-8008 or SCorrigan@USChamber.com. Thank you for your attention to this matter.
Sincerely,
Watson M. McLeish
Senior Vice President, Tax Policy
U.S. Chamber of Commerce
[1] 2026-11 I.R.B. 685.
[2] Unless otherwise indicated, all textual references to “section” are to sections of the Internal Revenue Code of 1986, as amended (“Code”).
[3] Pub. L. No. 119-21, § 70307, 139 Stat. 72, 198 (2025).
[4]See H. Comm. on the Budget, Rep. to Accompany H.R. 1, H.R. Rep. No. 119-106, pt. 2, at 1594 (2025). Lawmakers also believed that extending 100% bonus depreciation to qualified production property would promote neutrality between business investment and other business expenses while helping to reduce tax disadvantages faced by capital intensive businesses. See id.
[5]See, e.g., Council of Econ. Advisers, Exec. Off. of the President, The Annual Report of the Council of Economic Advisers 30 (2026) (finding that temporary factory expensing under section 168(n) will lead to an investment surge of 3.1% to 3.8% during the first four years, adding another 0.1% to 0.2% to GDP and raising wages by about $500 to $900).
USCC Comments on Notice 2026-16
About the author
Watson M. McLeish
Watson McLeish is senior vice president for Tax Policy at the U.S. Chamber of Commerce, where he serves as the primary adviser on all tax policy-related matters.
