One Big Beautiful Bill Act Signed into Law

News Summary

President Trump has signed the One Big Beautiful Bill Act (OBBBA), implementing significant changes to federal tax law that aim to bolster business stability and investment opportunities. The OBBBA makes permanent tax cuts from the 2017 Tax Cuts and Jobs Act while preventing a potential $4 trillion tax increase. Businesses will benefit from lower corporate tax rates and various provisions encouraging economic growth and job creation. State legislatures, particularly in Alabama, are expected to assess the implications of these changes in the upcoming legislative sessions.

Montgomery, Alabama – The One Big Beautiful Bill Act (OBBBA) was officially signed into law by President Trump on July 4, 2025, introducing crucial changes to federal tax law aimed at enhancing business stability and promoting investment opportunities across the nation. Primarily, the OBBBA has successfully averted a potential $4 trillion tax increase that would have surfaced had the Tax Cuts and Jobs Act of 2017 (TCJA) expired as scheduled.

The OBBBA emphasizes two key themes: permanence and predictability. Corporations will now experience tax rates permanently reduced from 35% to 21%, allowing businesses to plan their finances with improved clarity regarding their federal tax obligations. Additionally, most tax cuts from the TCJA that were nearing their expiration at the end of 2025 have been made permanent, further solidifying financial security for businesses.

State legislatures, particularly Alabama’s, will closely observe the impact of these federal tax law changes. The Alabama Legislature and the Department of Revenue (DOR) are expected to address Alabama-specific adjustments during the Spring 2026 regular session, as no special session for further discussions is anticipated in the fall of 2025.

Key Provisions of the OBBBA

The OBBBA includes a variety of business-specific provisions designed to foster economic growth and job creation. Here are ten notable aspects:

1. 100% bonus depreciation for most depreciable assets placed in service after January 20, 2025, including specific real property related to manufacturing, retroactively effective.
2. Immediate expensing of tangible personal property and “canned” computer software, up to $2.5 million annually, for assets placed in service starting January 1, 2025, also retroactively effective.
3. Immediate expensing for qualified research and experimentation (R&D) expenditures domestically, including deductions for unamortized prior expenditures, with retroactive effect.
4. Business interest deductions increased to 30% of EBITDA, effective from January 1, 2026.
5. The SALT cap has been raised to $40,000 for married taxpayers filing jointly, with phase-outs beginning at $500,000 in modified adjusted gross income.
6. A permanent Section 199A deduction of 20% of qualified business income for pass-through entity owners has increased phase-out thresholds.
7. Enhanced opportunities in qualified opportunity zones, along with new markets tax credits and low-income housing credits.
8. Charitable contributions by C corporations are limited to deductions exceeding 1% of federal taxable income, maintaining a 10% cap.
9. Employees receiving overtime wages up to $25,000 annually will be exempt, with phase-outs after $300,000 modified AGI, effective retroactively from January 1, 2025, and sunsetting post December 31, 2028.
10. Exemption for qualified tip income reported via payroll, adhering to similar deduction limits and phase-outs as overtime.

Advisory for Businesses

In light of the new regulations, businesses are strongly encouraged to consult with accounting firms. This will assist in evaluating the implications of the retroactive provisions specifically regarding capital expenditures and hiring practices, ensuring compliance and maximizing the benefits offered by the OBBBA.

Sector-Specific Impacts

The OBBBA also implements provisions targeted at multiple sectors, including the gaming industry, which will see the slot tax reporting threshold increased from $1,200 to $2,000. This adjustment aims to not only reduce administrative burdens on casinos but also enhance player engagement.

Alongside these adjustments, enhancements to federal Qualified Small Business Stock (QSBS) rules have been included to boost investor benefits for startups. Notably, New Jersey has enacted a law granting QSBS income exemptions from both federal and state income taxes, while Alabama, California, Mississippi, and Pennsylvania currently do not provide such QSBS benefits.

These comprehensive tax reforms under the OBBBA are expected to have lasting implications on the federal tax landscape, presenting businesses with the tools to navigate fiscal challenges and capitalize on new opportunities.

Deeper Dive: News & Info About This Topic

• Lowenstein: Tax Reform 2025 – What the OBBBA Means for Startups
• Gambling News: OBBBA Raises Slot Tax Reporting Threshold
• The Employer Report: Senate Passes No Tax on Tips and Overtime
• Kiplinger: What’s Happening with Taxes on Overtime Pay
• CBIZ: Big Beautiful Bill
• Wikipedia: Tax Reform
• Google Search: OBBBA
• Google Scholar: OBBBA
• Encyclopedia Britannica: Tax Reform
• Google News: OBBBA

Author: STAFF HERE HUNTSVILLE WRITER

The HUNTSVILLE STAFF WRITER represents the experienced team at HEREHuntsville.com, your go-to source for actionable local news and information in Huntsville, Madison County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Panoply Arts Festival, Rocket City Brewfest, and Huntsville Comic & Pop Culture Expo. Our coverage extends to key organizations like the Huntsville/Madison County Chamber of Commerce and HudsonAlpha Institute for Biotechnology, plus leading businesses in aerospace, defense, and manufacturing that power the local economy such as Boeing, SAIC, and Mazda Toyota Manufacturing. As part of the broader HERE network, including HEREBirmingham.com, we provide comprehensive, credible insights into Alabama's dynamic landscape.