On July 4, President Trump signed the “One Big Beautiful Bill” (OBBB) into law after a perfunctory approval by the House of Representatives following the omnibus amendment made to the OBBB by the Senate. The OBBB is a rebuke of the carbon reduction focus of President Biden’s Inflation Reduction Act (IRA) paired with a few of President Trump’s campaign promises and an extension of the tax reduction framework introduced during Trump 1.0 under the Tax Cuts and Jobs Act (TCJA). Business leaders will find that the bill does little to fundamentally change the taxation of U.S. businesses with the exception of their ability to expense certain property.
Parsons Behle & Latimer’s (Parsons) attorneys will offer an informational, half-day seminar on Aug. 21, 2025, from 8:30 – noon to share a detailed look at how the OBBB will affect businesses going forward. Until then, we will publish regular updates and analysis on various provisions of the bill. We invite you to join us for our August seminar. An invitation will be sent soon.
The following is our summary of the top 10 core aspects of the OBBB for businesses:
1. Extension of Core TCJA Provisions. The OBBB makes permanent the core provisions of the TCJA, including reduced tax rates and increased standard deductions. Section 199A providing for the 20% deduction for qualified business income has been made permanent and reindexed based on inflation under the OBBB but is otherwise generally unchanged. The top marginal individual tax rate has been permanently repealed and all miscellaneous itemized deductions except educator expenses have been permanently repealed.
2. Repeal of the IRA. The OBBB eliminates the incentives in the IRA designed to catalyze the decarbonization of the U.S. economy. The final version of the OBBB did leave many of the most critical incentives in place for projects that begin construction prior to July 4, 2026, and the framework for transferability of tax credits.
3. Tiered Waged Taxation and Classification. Responding directly to campaign promises made by President Trump, the OBBB retroactively changes the income taxation of “tips” and “overtime” in an effort to exempt these wage categories from taxation. The final OBBB added significant safeguards to qualifying such exempt wages which require guidance from Treasury to implement and will materially complicate the task of employers to accurately report employee income.[1]
4. Permanent Key Housing Frameworks. The OBBB makes three incentive structures permanent that have been driving affordable housing: Low Income Tax Credits, New Markets and Opportunity Zones. These investment mechanics are available only in certain geographies and are the core means in which the U.S. has incentivized housing development.
5. Bonus Depreciation, R&D Expenditures and Manufacturing Credits. Under the OBBB, Bonus Depreciation is now available at 100% for property placed in service after Jan. 19, 2025. Domestic research and development (R&D) expenditures can be deducted in the year incurred. Additionally, the manufacturing investment credit has been increased to 35% from 25%.
6. Refreshed Qualifying Small Business Stock (QSBS). The QSBS mechanic under Section 1202 has been refreshed by the OBBB to allow for increased participation and earlier exits from those qualifying businesses.
7. Increased SALT Deduction and Standard Deduction. The cap on itemized deductions for state and local taxes (SALT) is increased under the bill up to $40,000 subject to an income phaseout beginning at $500,000 with additional scaling reductions. The standard deduction is also increased to $15,750 for individuals and $23,625 for head of household filers.
8. Permanent Enhanced Gift and Estate Tax Exclusion. The estate and gift tax exclusion set by the TCJA has now been made permanent at $15 million and will be annually increased by inflation.
9. Deduction for Income from “Rural and Agricultural” Loans. The OBBB allows certain lenders to exclude 25% of the income from loans that are secured by real property in rural and agricultural areas.
10. Increased 1099 Threshold. Information reporting statements are now only required for payments in excess of $2,000 (previously $600) and the threshold is now inflation indexed.
Though the OBBB does not radically transform the U.S. tax landscape, it is a large bill with several nuanced provisions that will impact specific industries and should be reviewed carefully.
Parsons’ upcoming seminar on Aug. 21, 2025, will offer a deeper dive into these developments and their practical implications. Look for an invitation coming soon. In the meantime, we encourage businesses to monitor our regular updates and engage with our team to navigate this new era of tax law effectively.
[1] Contrary to some reporting, the OBBB does not eliminate taxes on social security.
