What Is a Durable Good? Definition and Examples

Durable goods are tangible products not quickly consumed, providing value and utility over an extended period. They play a significant role in household finances and the broader economy. Their purchase often represents a notable financial decision for consumers and businesses, influencing economic indicators.

What Defines a Durable Good?

A durable good is characterized by its longevity, having an expected useful life of three years or more. These items are not used up in a single instance or consumed rapidly; instead, they offer ongoing utility through repeated use. This long lifespan means they are purchased infrequently compared to other types of goods.

The higher initial cost associated with durable goods often necessitates careful financial planning for consumers. For businesses, the acquisition of durable goods involves specific accounting and tax considerations. Rather than being expensed immediately like routine supplies, these assets are capitalized on the balance sheet, meaning their cost is spread out over their useful life through depreciation.

Tax laws provide incentives for businesses to invest in durable goods. Section 179 of the Internal Revenue Code allows qualifying businesses to deduct the full purchase price of eligible property in the year it is placed in service. For 2025, businesses can deduct up to $1,250,000, with a phase-out beginning when purchases exceed $3,130,000. Bonus depreciation also permits an immediate deduction of a percentage of the cost of eligible assets, with a 40% rate for property placed in service in 2025.

Businesses can utilize the de minimis safe harbor election, which allows for the immediate expensing of lower-cost tangible property. The threshold for this election is $2,500 per item or invoice for businesses without audited financial statements, and $5,000 for those with applicable financial statements. This election reduces the administrative burden of tracking and depreciating small-dollar assets, aligning tax treatment with internal accounting policies.

Distinguishing Durable from Non-Durable Goods

The primary distinction between durable and non-durable goods centers on their expected lifespan and consumption patterns. Non-durable goods are items consumed quickly, often in a single use, or have a useful life of less than three years. These goods include products like food, beverages, cleaning supplies, and personal care items.

Unlike durable goods, which provide ongoing utility, non-durable goods offer immediate, short-term benefits. Their cost is lower, and businesses expense them immediately as a cost of goods sold or an operating expense. This contrasts with durable goods, whose higher cost and long-term utility necessitate capitalization and depreciation. Non-durable purchasing is driven by recurring needs, while durable goods purchases are less frequent and involve more significant financial commitments.

Common Examples of Durable Goods

Durable goods encompass a wide array of products that consumers and businesses rely on for extended periods. In households, common examples include major appliances such as refrigerators, washing machines, and ovens. Furniture items like sofas, tables, and beds also fall into this category, providing lasting utility and comfort within a home.

Vehicles, including cars, trucks, and motorcycles, represent significant durable goods purchases. Electronics such as televisions, computers, and smartphones are also considered durable goods. For businesses, durable goods extend to items like office furniture, machinery, and specialized equipment, which are essential for operations and contribute to productivity.