What You Need to Know About the One Big Beautiful Bill Act
On May 23, the House of Representatives narrowly passed the One Big Beautiful Bill Act (215-214. The legislation now moves to the Senate, where revisions are expected before a planned vote by July 4. The bill includes several tax provisions of significant interest to wholesaler-distributors and their workforce.
Key Provisions:
- Full Expensing of R&E Expenditures (2025–2030): Restores the ability to immediately deduct domestic research and experimental costs like salaries, materials, and facility overhead, excluding items such as advertising or IP acquisitions.
- 100% Expensing for Factory Construction/Improvements: Allows full expensing of new or improved U.S.-based production facilities used for manufacturing or refining, excluding office space, with eligibility tied to construction and service timelines.
- Federal Deduction for Overtime Pay (through 2028): Provides a federal income tax deduction for FLSA-qualified overtime pay earned by non-highly compensated employees, with no overlap allowed with other wage-related deductions.
- New SALT Deduction Cap for Pass-Throughs: Limits state and local tax deductions to $40,000 for certain pass-throughs, while exempting those engaged in qualified trades or businesses under the 199A provision.
- Expanded Employer Child Care Credit: Increases the childcare credit for employers, covering a broader range of costs including facility construction, staff training, and third-party service contracts, with higher limits for small businesses.
- Repeal of Most Green Energy Credits: Phases out or repeals key clean energy and electric vehicle tax credits between 2025 and 2026, while extending only select incentives like biofuels and tightening rules on credit transfers.
- 100% Bonus Depreciation Restored (2025–2030): Reinstates full bonus depreciation for qualified property with a recovery period of 20 years or less, benefiting equipment and software purchases made within the eligible timeframe.
