On May 18, 2025, the House Budget Committee voted to advance President Trump’s “One Big Beautiful Bill,” a federal budget reconciliation act with sweeping implications for tax policy, border security, defense spending and more. For businesses, commercial building owners, and real estate investors, the most notable elements of the bill lie in its proposed tax provisions—particularly those affecting energy-efficient commercial buildings, bonus depreciation, and research and development (R&D) investments. Here’s what you need to know:

  1. Section 179D Remains Intact

Permanently added to the tax code in 2020 and significantly expanded under the Inflation Reduction Act of 2022, Section 179D provides a deduction for qualifying energy-efficiency measures installed in a commercial building’s interior lighting systems, HVAC and hot water systems, and the building envelope. This deduction is not mentioned in the newly proposed tax legislation, indicating that it will remain intact going forward—which is welcome news for architects, engineers, contractors, and building owners who rely on the §179D deduction to offset the costs of designing and constructing energy-efficient properties.

At this time, the bill does not provide clarity around the prevailing wage and apprenticeship requirements introduced by the Inflation Reduction Act. These labor standards currently determine whether taxpayers qualify for the maximum §179D deduction ($5.81 per square foot in 2025) or a lesser amount. Without clarification, it’s uncertain whether those requirements will be modified, eliminated, or further enforced.

For now, §179D remains a powerful planning tool—but designers, contractors, and building owners should stay tuned for guidance on compliance with labor standards.

  1. 100% Bonus Depreciation is Reinstated Through 2029

For businesses and real estate investors, one of the most important provisions of the proposed law involves the return of 100% bonus depreciation. Under current law, bonus depreciation has been steadily declining: in 2025, only 40% of the cost of qualifying property may be deducted in the first year, with that figure set to drop to 20% in 2026 and phase out completely thereafter.

The One Big Beautiful Bill would reverse course and restore 100% bonus depreciation for qualified property acquired after January 20, 2025, and placed into service before January 1, 2030. This would allow businesses to fully deduct the cost of eligible assets—such as machinery, equipment, and certain building improvements—in the year they are placed into service.

This proposed change would significantly enhance the impact of cost segregation studies, which identify and reclassify components of commercial properties into shorter-lived asset categories (such as 5-, 7-, or 15-year property). When 100% bonus depreciation is available, these shorter-life assets can be immediately expensed rather than depreciated over decades.

For real estate owners, developers, and businesses investing in property, this could result in substantial upfront tax savings and improved cash flow. If the bill becomes law, now may be the perfect time to revisit your asset portfolio or planned construction projects to explore the benefits of a cost segregation study under the reinstated rules.

  1. R&E Costs Expensable Through 2029

The new bill would allow businesses to fully expense domestic research and experimentation (R&E) costs for tax years 2025 through 2029. This provision temporarily reverses a change from the Tax Cuts & Jobs Act that required R&E expenses to be amortized over five years beginning in 2022—a change that was widely criticized by the business and tech communities. Allowing 100% expensing would provide much-needed relief to innovation-driven companies and may help stimulate domestic research and development activity.

What’s Next?

While the bill has passed the House Budget Committee, it still faces debate and amendments before becoming law. In the meantime, business taxpayers should take the following steps:

  • Review Current Projects. Assess ongoing and planned projects to determine eligibility for the §179D deduction and ensure compliance with prevailing wage requirements while they remain in effect.
  • Plan Capital Expenditures. Consider timing asset acquisitions to take advantage of the reinstated 100% bonus depreciation starting in 2025.
  • Evaluate R&E Activities. Identify domestic research and experimentation activities that may benefit from immediate expensing under the proposed changes.

At Capital Review Group, we are closely monitoring legislative developments to help our clients navigate complex tax incentives like §179D, bonus depreciation, and R&D credits. If you have questions about how your business may be affected—or how to plan for potential changes—contact us today to schedule a consultation!