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The One Big Beautiful Bill Act: Key Tax Impacts Affecting Businesses

On July 4, 2025, President Donald J. Trump signed H.R. 1, known as the “One Big Beautiful Bill Act,” into law after its narrow approval in Congress. The Senate passed its version of the bill, which made various amendments to the version originally passed by the House, on July 1, 2025, by a vote of 51 to 50. The House passed the Senate bill without amendment by a margin of 218 to 214 on July 3, 2024.

The One Big Beautiful Bill Act delivers major tax reforms with broad implications for businesses, most notably reinstating favorable treatment for key expenses. Its core provisions address the following areas that are applicable to a majority of businesses. [1]

Bonus Depreciation Extension:

• Permanently reinstates 100% bonus depreciation for qualified assets placed in service after January 19, 2025.

• Expands eligibility to include “Qualified Production Property,” defined as nonresidential real property located in the U.S. and used by the taxpayer as an integral part of a qualified production activity resulting in a “substantial” transformation of that property. The qualified production property must be placed in service before January 1, 2031, and construction must have begun on January 19, 2025, and before January 1, 2029.

Section[2] 179 Expensing:

• Businesses can immediately expense up to $2.5 million in qualifying property purchases. Additionally, the phase-out threshold has been raised to $4 million, allowing a greater number of companies to fully benefit from these enhanced deductions.

• Despite the availability of 100% bonus depreciation at the federal level, many states do not conform to bonus rules but do allow Section 179 expensing. Therefore, businesses may prefer Section 179 to optimize both federal and state tax benefits.

Research and Expenditures (“R&E”) Deduction Flexibility:

• Beginning after December 31, 2024, taxpayers may either immediately expense or capitalize and amortize domestic R&E costs over at least 60 months.

• Small businesses[3] may elect to retroactively deduct eligible R&E costs after December 31, 2021, by amending tax returns to potentially claim refunds.

• Other businesses can elect to deduct unamortized R&E costs incurred between December 21, 2021, and January 1, 2025, fully in the first tax year after 2024 or spread the deduction evenly over two years. The election is considered a taxpayer-initiated accounting method change, applied prospectively with no Section 481(a) adjustments. Additional guidance is expected within one year of the bill’s enactment.

• Experimental research conducted outside the United States must continue to be capitalized and amortized over a 15-year period, in accordance with Section 174.

Business Interest Limitation:

• Beginning with tax years after December 31, 2024, the base for determining the business interest deduction limitation under Section 163(j) will shift to an EBITDA-based calculation, reinstating depreciation and amortization into the formula, allowing for a larger interest expense deduction. The deduction limitation percentage remains at 30%.

International Taxation:

• Key international tax changes include a permanent increase in the Base Erosion and Anti-Abuse Tax (BEAT) rate to 10.5%, codification of the Controlled Foreign Corporation (CFC) look-through rule, and reinstatement of pre-TCJA limitations on downward attribution in determining CFC status.

• The Act also revises the calculation of a U.S. shareholder’s pro rata share of CFC income. It lowers the deduction percentages for Global Intangible Low-Tax Income (GILTI), renamed to “net CFC tested income” (NCTI), and Foreign-Derived Intangible Income (FDII), renamed to “foreign-derived deduction eligible income” (FDDEI), to 40% and 33.34%, respectively. The effective tax rates on NCTI and FDDEI increased slightly to 14%.

How Centri Can Help with Tax Law Changes

The enactment of the One Big Beautiful Bill Act brings significant changes to the U.S. tax code, with wide-reaching implications for businesses across all industries. At Centri, we’re committed to helping you understand these developments and respond with confidence. Our tax professionals are available to discuss how the new provisions may affect your business, provide strategic planning support, and offer ongoing guidance to help you make informed decisions. Please contact us to learn how we can support your business.

[1] This article focuses on provisions of the “One Big Beautiful Bill” that are applicable to a broad majority of businesses. There were other provisions of the bill that impact tax energy credits and the Opportunity Zone program as well more individual and pass-through focused items not addressed in this article.

[2] Unless otherwise indicated, all Section references are to the Internal Revenue Code of 1986, as amended (the “Code”), and all Regulation Section (“Treas. Reg. section”) references are to the Treasury Regulations promulgated thereunder.

[3] For tax years beginning in 2025, the Section 448(c) gross receipts test is met if a taxpayer’s average annual gross receipts in the prior three years do not exceed $31 million (as determined by applying aggregation rules, as applicable).

Frank Angeleri

Senior Director | Tax Advisory Practice | CPA

Frank is a Senior Director at Centri Business Consulting in the firm’s Tax Advisory Practice.  He joined Centri in November 2023.  He has over 40 years of experience guiding domestic and international companies in forward-thinking, transparent tax planning to create more efficient and sustainable business entities. Over the course of his career, he has supported clients across the manufacturing, wholesale, retail distribution, energy, and technology industries on cross-border tax structuring, data-driven tax rate consulting, acquisition and post-integration planning, and regulatory compliance.. View Frank Angeleri's Full Bio

Mary Chou

Managing Director | CPA

Mary is a Managing Director at Centri Business Consulting in the firm’s Tax Advisory Practice. She joined Centri in March 2025.  She has more than 18 years of experience leading diverse teams and helping multi-national corporations with various tax matters including ASC 740 accounting for income taxes, federal and state tax compliance, acquisitions, dispositions, and a wide range of tax planning consulting services. View Mary Chou's Full Bio