Alex Howe

2025 Top LIFO Election Locks

In 2025, new tariffs were applied and existing tariff rates were increased to a substantial portion of goods imported into the United States. The current average effective tariff rate on U.S. imported goods is 18%, which is nearly 7x higher than the 2024 average effective tariff rate of 2.5%. Since tariffs must be included as a component of inventory costs & can’t be expensed as period costs, they have a direct effect on inflation. In 2025, tariffs have created elevated inflation in most industries when compared to the historical averages. As a result, most companies can obtain material tax benefits from electing LIFO this year.

The most notable LIFO election opportunities from a tax benefits perspective are summarized below by Bureau of Labor Statistics Producer Price Index (BLS PPI) group. The 2025 year to date inflation rates for the eight months ended August 2025 are listed first & the 2025 annualized inflation rates are listed second.

  • All commodities: 3.5% & 5.3%
  • Processed foods & beverages: 3.6% & 5.3%
    • Meats, poultry & fish: 10.6% & 15.9%
    • Beverages & beverage materials: 3.8% & 5.7%
  • Textile products & apparel: 1.5% & 2.2%
  • Fuels & related products: 4.7% & 7%
    • Natural gas: 3.3% & 5%
    • Gasoline: 7.1% & 10.7%
    • Asphalt & other petroleum & coal products: 16.3% & 24.5%
  • Metals & metal products: 8.9% & 13.4%
    • Steel mill products: 15.3% & 22.9%
    • Nonferrous metals (including copper and aluminum): 14.8% & 22.1%
    • Hardware: 5.6% & 8.4%
    • Plumbing fixtures & fittings: 8.1% & 12.2%
    • Heating equipment: 7.3% & 11%
    • Fabricated structural metal products: 5.4% & 8.2%
  • Machinery & equipment: 3.7% & 5.6%
    • Construction machinery & equipment: 4.4% & 6.6%
    • General purpose machinery & equipment: 5% & 7.5%
    • Electrical machinery & equipment: 3.5% & 5.4%
  • Furniture & household durables: 3.3% & 4.9%
    • Household furniture: 3.1% & 4.6%
    • Commercial furniture: 4.1% & 6.2%
    • Household appliances: 3.5% & 5.2%
  • Nonmetallic mineral products: 2.5% & 3.7%
    • Concrete ingredients & related products 4.7% & 7.1%
    • Asphalt felts & coatings: 3.8% & 5.7%
  • Transportation equipment (for manufacturers and wholesalers): 1.1% & 1.7%
    • Motor vehicle parts: 2.1% & 3.1%
    • Aircraft & aircraft equipment (including parts) 1.6% & 2.4%
  • Auto dealers
    • New vehicle import dealers:
      • Weighted average inflation rate: 2.3%
      • Low/high inflation range: 0.5% to 5.1%
    • Used vehicle dealers: 3.8% & 7%
    • Parts: 3.1% & 4.6%
  • Other dealerships
    • Motor homes: 1.8% & 2.7%
    • Travel trailers & campers: 2.4% & 3.6%
    • Boats: 2.9% & 4.3%
  • Miscellaneous products: 3.8% & 5.7%
    • Toys, sporting/athletic goods & small arms: 1.5% & 2.3%
    • Tobacco – 7.8% & 11.7%
    • Medical, surgical & personal aid devices: 1.2% & 1.8%
    • Personal and industrial safety equipment & clothing – 2.7% & 4.1%

LIFOPro’s 2025 Top LIFO Election Candidates List

Download the complete list & tax benefit calculator Excel file here: LIFOPro’s 2025 Top LIFO Election Candidates List & Tax Benefit Calculator

LIFOPro’s 2025 top LIFO election candidates list allows you to quickly determine or accomplish the following:

  • If LIFO is preferable for a company or industry
  • If a specific company or industry is a top LIFO election candidate for the 2025 year end
  • Estimate election year & long-term LIFO tax benefits for a specific company or industry
  • Weigh LIFO’s costs/benefits (such as ROI) & risks/rewards (such as forecasting tax benefit size & probability)
  • Record a 2025 LIFO adjusting journal entry, present upcoming year end financial statements on a LIFO basis & ensure IRS LIFO conformity rule compliance (which requires for financial reports/statements to be presented on a LIFO basis beginning in the first year that LIFO is used on the tax return)

LIFOPro’s complete list of the 2025 top LIFO election candidates are listed below, and are broken out into the following three tables:

  • Major commodity group (Table 1): BLS PPI major commodity groups are the least-granular or broadest BLS groupings, and there are a total of 15 major commodity groups. This list is best-suited for those who’re seeking to create a 2025 LIFO election scoping client target list. For example, Table 1 shows three BLS groups that are not 2025 top LIFO election candidates, and therefore a CPA firm could exclude clients who’re in those groups from scoping out a 2025 election. Using Table 1 helps CPA firms save time and resources scoping out LIFO elections for clients by only targeting clients who’re in major commodity groupings that are listed as a 2025 Top LIFO election candidate. This maximizes the probability that the 2025 LIFO election scoping target clients will have a meaningful tax benefit created from adopting LIFO this year.
  • Subgroups (Table 2): There are a total of 96 subgroups which break out goods into more granular groupings than the 15 major commodity groups. The Subgroup table is best suited for pre-screening a narrower group of clients or possibly a single client as it will provide a more precise estimate of the inflation & resulting tax benefit calculated than the figures provided in Table 1. For example, let’s assume you’re pre-screening a dairy products distributor considering a LIFO election. If you were to use Table 1, you’d assume the company should explore a 2025 LIFO election because the Processed foods & feeds major commodity grouping is listed as a 2025 Top LIFO election candidate. But if you were to use Table 2, you’d find that the Dairy products subgroup is not a 2025 Top LIFO election candidate because there’s deflation, which would increase taxable income.
  • Product classes (Table 3): There are a total of 301 product classes which break out goods into more granular groupings than the 15 major commodity groups and 96 subgroups. The product class table is best suited for pre-screening a specific client/industry whose product mix is narrower than the groupings provided in Tables 1 and 2. For example, let’s assume you’re prescreening a construction machinery parts distributor for a 2025 LIFO election. In Table 3, you’d find the Parts for construction machinery & equipment has a 54% annualized inflation rate, which is nearly 9x higher than the construction machinery & equipment inflation rate of 6.6% shown in Table 2 & nearly 10x higher than the machinery & equipment inflation rate of 5.6% shown in Table 1.
Table 1. 2025 Top LIFO Candidates by BLS PPI Major Commodity Group

Table 2. 2025 Top LIFO Candidates by BLS PPI Subgroup

Table 3. 2025 Top LIFO Candidates by BLS PPI Product Class


2025 Top LIFO Election Candidates & Tax Benefit Calculator
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