G.1 Background
On July 4, 2025, President Trump signed into law the legislation formally titled “An Act to Provide
for Reconciliation Pursuant to Title II of H. Con. Res. 14” (“the 2025 Act”) and
commonly referred to as the One Big Beautiful Bill Act. The centerpiece of the bill
is the extension of expiring — and in some cases expired — provisions of the 2017
Act. While many provisions of the 2025 Act focus on tax changes for individuals,
such as extending current individual tax rates originally put in place in the 2017
Act, the new legislation also adjusts a number of provisions affecting businesses
that were similarly subject to sunsets, phase-outs, or phase-ins that would have
taken effect in the absence of action by Congress or that have already taken effect.
For example, recent years have seen the loss of the ability to immediately expense
R&D costs; a new, more restrictive calculation of the extent to which net
interest expenses are deductible; and a phase-down of bonus depreciation. Moreover,
barring action by Congress, 2026 would have witnessed an increase in the tax rate
applied to the BEAT and a lower deduction for both the GILTI) and FDII regimes.
The net cost of the 2025 Act was somewhat reduced by the addition of some
revenue-raising provisions, including phase-outs of and restrictions on several
clean energy tax incentives. Further, the new law makes various broadly applicable
changes to the GILTI and FDII regimes. While many are taxpayer friendly, they are
paired with lower deduction amounts for GILTI and FDII, meaning that the combined
impact is very likely to depend on an individual company’s facts and
circumstances.
While most of the changes made by the new legislation are effective in future tax
years, some of its provisions are effective in the current tax year. In certain
cases, the changes may also affect prior tax years. For details about specific
provisions of the 2025 Act, see Deloitte’s A Closer Look: Inside the New Tax Law.