Sponsor
Shelley Moore Capito
Senator · R-WV
Senator · R-WV
The bill permanently preserves and expands interest-related deductions—giving businesses more predictable tax treatment and cash flow—while reducing federal revenue and creating a modest competitive tilt toward capital-intensive firms plus some administrative burden.
Businesses (including small businesses) will be able to permanently deduct depreciation, amortization, or depletion when calculating the section 163(j) business interest limitation, preserving interest deductibility and often lowering taxable income and tax liability for affected firms (freeing cash flow for investment).
Taxpayers and businesses gain predictable tax treatment for taxable years after 2021, reducing compliance uncertainty and planning complexity for firms and their advisers.
All taxpayers could face higher federal budget deficits or reduced government resources because permanently allowing these deductions will lower corporate and business tax revenue.
Capital-intensive firms (and businesses that can claim large depreciation/amortization) may gain a competitive advantage over less-capitalized competitors because of larger allowable interest-related deductions.
The IRS and tax preparers will need to issue guidance and update forms/systems, generating administrative costs and short-term compliance burdens.
Based on analysis of 2 sections of legislative text.
Makes permanent the exclusion of depreciation, amortization, and depletion when computing the business interest limitation under section 163(j).
Introduced February 13, 2025 by Shelley Moore Capito · Last progress February 13, 2025
Makes permanent a tax rule that lets businesses keep depreciation, amortization, and depletion deductions when computing the business interest limitation. The change removes a sunset date so those deductions continue to be excluded from the interest-limitation calculation for taxable years beginning after December 31, 2021.