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The bill makes business interest-related deductions permanent, giving firms lower tax bills and greater planning certainty, but it reduces federal revenue and disproportionately benefits capital‑intensive or highly‑levered businesses.
Small businesses and other businesses can permanently deduct depreciation, amortization, and depletion when calculating the business interest limitation, increasing allowable interest-related deductions and lowering taxable income for affected firms.
Small businesses and taxpayers gain permanent tax-rule certainty because prior temporary tax relief is made permanent, improving business planning and investment decisions after 2021.
All taxpayers could face higher federal deficits or need for offsets because lower business tax liabilities will reduce federal tax revenue.
Capital-intensive or highly-levered firms (and their owners) are likely to receive larger interest-related tax benefits, creating uneven advantages across industries and potentially distorting competition.
Based on analysis of 2 sections of legislative text.
Permanently allows businesses to include depreciation, amortization, and depletion when calculating the limit on business interest deductions under the tax code. The change applies to tax years beginning after December 31, 2021, removing a prior sunset date so the allowance is no longer temporary.
Introduced February 13, 2025 by Shelley Moore Capito · Last progress February 13, 2025