Sponsor
Rafael Edward Cruz
Senator · R-TX
Senator · R-TX
The bill accelerates and locks in tax relief for businesses, landlords, and R&D firms—lowering current tax bills and encouraging investment—while reducing federal revenues and creating notable retroactive, administrative, and distributional burdens that may advantage capital-intensive firms over labor-focused businesses.
Business owners (including farmers with orchards/vineyards) can immediately expense 100% of qualifying property placed in service, lowering taxable income and improving near-term cash flow for capital investments.
Firms that perform research and experimental (R&E) activities can deduct R&E costs immediately (no mandatory amortization), improving cash flow and encouraging near-term R&D investment.
Making prior bonus-depreciation rules permanent and retroactive reduces tax-planning uncertainty and simplifies long-term financial reporting for taxpayers and financial institutions.
Millions of taxpayers and the federal budget: larger and earlier depreciation and R&E deductions will reduce federal tax revenues and could increase deficits or force cuts/offsets elsewhere.
Taxpayers, pass-through entities, and the IRS will face substantial administrative and compliance burdens from retroactive applications, new elections/methods, updated cross-references, and required accounting adjustments.
Small businesses and workers: the expanded expensing provisions disproportionately benefit capital-intensive and larger firms, potentially skewing competition away from labor-intensive businesses.
Based on analysis of 4 sections of legislative text.
Makes 100% bonus depreciation permanent, indexes real‑property depreciation to inflation (with a growth factor), and restores immediate deductibility for R&E expenses.
Official title: Amend the Internal Revenue Code of 1986 to permanently allow a tax deduction at the time an investment in qualified property is made, and for other purposes.
Introduced June 12, 2025 by Rafael Edward Cruz · Last progress June 12, 2025
Makes permanent 100% bonus depreciation for qualified property (codifying full expensing as if enacted with the 2017 Tax Cuts and Jobs Act), creates an inflation-based adjustment to annual depreciation deductions for residential and nonresidential real property, and restores immediate deductibility for research and experimental (R&E) expenditures rather than requiring amortization. The bill changes multiple Internal Revenue Code provisions so businesses and real-estate owners can expense more costs up front and have depreciation allowances adjusted for inflation, while applying the R&E change retroactively to tax years starting after 2021.