Sponsors (12)
The bill makes business tax rules more generous and permanent—giving many small and capital‑investing firms bigger near‑term deductions and clearer long‑term rules—at the cost of lower federal revenue, potential advantage to capital‑heavy firms, and some short‑term administrative and planning uncertainty.
Small-business owners: can immediately deduct up to $1.5 million of qualifying asset costs and benefit from a raised phase-out threshold to $4 million, increasing near-term expensing and lowering short‑term tax bills when they buy equipment.
Businesses and taxpayers: may include depreciation, amortization, and depletion in interest limitation calculations for taxable years after 2024, reducing taxable income and potentially lowering tax liabilities.
Taxpayers and the IRS: get clearer, more predictable tax rules through removal of the sunset date and an updated indexing reference year, reducing compliance uncertainty for post‑2024 years.
Taxpayers/the federal budget: higher immediate expensing and broader deductions will likely reduce corporate and business tax receipts, which could increase the federal deficit or reduce funding for other programs.
Capital‑intensive businesses: are likely to receive larger tax benefits (via depreciation/amortization and expensing), which could disadvantage labor- or service‑heavy firms and create uneven competitive effects across industries.
Taxpayers and financial institutions: an unspecified edit in the bill could create administrative ambiguity until Treasury/IRS issues guidance, increasing short‑term compliance uncertainty and costs.
Based on analysis of 3 sections of legislative text.
Permanently allows depreciation/amortization/depletion in the business interest limitation and raises Section 179 expensing limits to $1.5M with a $4M phase‑out, effective after 2024.
Permanently allows depreciation, amortization, and depletion to be included when computing the business interest limitation, and raises the Section 179 immediate-expensing limits so more businesses can deduct the cost of qualifying property up front. The changes apply for taxable years beginning after December 31, 2024, and for property placed in service in those taxable years. The bill increases the maximum Section 179 deduction to $1,500,000 and the investment phase‑out threshold to $4,000,000, and updates the inflation-adjustment reference year used in Section 179 indexing rules.
Introduced May 8, 2025 by John A. Barrasso · Last progress May 8, 2025