On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (OBBBA), a sweeping legislative package that blends tax cuts with funding for defense and immigration, while also scaling back certain social programs. For business taxpayers, the biggest news is the law’s powerful incentives for capital investment and innovation, including the permanent reinstatement of 100% bonus depreciation. Read on to learn more about some of the key business-related provisions of the OBBBA.

100% Bonus Depreciation is Back—and It’s Here to Stay

Under the Tax Cuts and Jobs Act (TCJA) of 2017, bonus depreciation was scheduled to phase down gradually, dropping from 60% in 2025 to 40% in 2026 and eventually disappearing. The new law reverses course. Effective for assets acquired after January 19, 2025 and placed in service anytime thereafter, businesses can now permanently deduct 100% of the cost of qualified property in the year it is placed into service. This includes machinery, equipment, and even some commercial real estate, such as factory buildings. The change may have the following effects:

  • Enhanced cash flow and accelerated return on investment
  • Reduced uncertainty by making 100% bonus depreciation permanent
  • Benefits for capital-intensive industries such as manufacturing, logistics, and construction

Combined with cost segregation studies, which reclassify building components into shorter-life asset categories, this provision will allow real estate owners and developers to unlock significant upfront tax savings.

Full Expensing for Domestic R&E Costs Through 2029

Prior to the enactment of the OBBBA, taxpayers could choose to either deduct research and experimentation (R&E) costs in the year they were incurred or amortize them over a five-year period if tax liability was limited. Under the new law, immediate expensing of domestic R&E costs becomes the standard treatment for expenses paid or incurred during tax years beginning after December 31, 2024. However, costs incurred by R&E activities conducted outside the U.S. must be amortized over 15 years. In summary:

  • Domestic R&E expenses may be fully deducted in the year incurred—without needing to elect or qualify
  • Applies retroactively to tax years starting after December 31, 2024
  • Foreign R&E must still be amortized, thereby incentivizing U.S.-based research and development
  • Simplifies planning and enhances cash flow and reinvestment potential for companies in technology, biotech, manufacturing, and other innovation-heavy sectors

If your company engages in substantial R&E activities, this change will provide a more predictable and advantageous framework for deducting those costs—and may free up capital for further growth.

Section 179D Will Terminate for Projects Beginning Construction After June 30, 2026

While the §179D deduction for energy-efficient commercial buildings will remain in place for now, the One Big Beautiful Bill sets a firm cutoff date: projects must begin construction by June 30, 2026 in order to qualify. This gives businesses and design professionals a limited window to take advantage of this powerful tax incentive.

Originally made permanent in 2020 and later expanded under the Inflation Reduction Act of 2022, §179D of the federal tax code allows commercial building owners to claim up to $5.81 per square foot (indexed for inflation) in deductions for qualifying energy efficiency measures, such as upgraded HVAC systems, lighting, and the building envelope. Architects, engineers, contractors, and other primary designers who perform qualifying work on buildings owned by government, nonprofit, tribal, or religious organizations may also claim the deduction.

The §179D deduction can translate into hundreds of thousands of dollars in tax savings for large-scale projects. Here’s what you can do to begin preparing for the 2026 sunset date:

  • Plan ahead. If you’re considering new construction or major renovations, work with your tax team early to ensure that §179D benefits are incorporated into your project timeline. Delays in the planning process could potentially mean missing out on substantial savings.
  • Leverage the deduction while you can. Design firms working on buildings owned by public-sector, nonprofit, or similar entities should continue claiming these deductions through the sunset period, as §179D remains one of the few direct federal incentives available to them.

Energy efficiency remains a priority in the commercial building space—but the tax incentives supporting it won’t last forever. Acting now can help secure significant savings while improving building performance and meeting sustainability goals.

Watch the Sunset: Many Benefits End After 2029

Although 100% bonus depreciation is permanent, many of the bill’s other tax benefits, including immediate R&D expensing, are scheduled to sunset after 2029 unless Congress acts to extend them. Here are a few steps business taxpayers should take in the meantime:

  • Accelerate planned R&E and capital investments to capture the full value of these provisions
  • Model multi-year tax scenarios that account for potential rollbacks after 2029
  • Stay informed about future legislative developments that could impact planning

What’s Next? Strategic Action Steps

At Capital Review Group, we recommend the following actions to maximize the benefits of the One Big Beautiful Bill:

  • Review your asset strategy. Consider bringing forward large equipment or real estate investments to benefit from 100% bonus depreciation.
  • Evaluate your R&D spend. Identify qualifying domestic R&D activities that could now be immediately deductible.
  • Explore cost segregation. Combine bonus depreciation with a cost segregation study to increase current-year deductions for real estate.
  • Plan for the future. Incorporate the 2029 sunset dates into your long-range tax forecasts and remain agile in response to evolving tax law.

Need Help Navigating the New Tax Landscape?

The tax professionals at Capital Review Group are here to help you leverage both existing tax law and the new provisions found in the One Big Beautiful Bill Act—whether through bonus depreciation, R&E credits, or the §179D deduction. Contact us today to discuss how the new law may affect your business and build a strategy tailored to your goals!