Tax Reform 2.0 — The One, Big, Beautiful Bill

Overview

On May 12, 2025, the House Ways and Means Committee released the text of the proposed tax legislation titled “The One, Big, Beautiful Bill” (the “Bill”), reflecting President Trump’s and the Republican Party’s legislative priorities. The Bill advanced through the Ways and Means Committee on May 14, 2025. This legislation seeks to permanently extend many of the tax cuts originally enacted under the 2017 Tax Cuts and Jobs Act (TCJA), which are currently set to expire at the end of 2025. Additionally, the Bill proposes to roll back or repeal several tax provisions introduced during the Biden administration related to renewable energy tax credits established under the Inflation Reduction Act (IRA).

The following is a high-level summary of certain key considerations, most of which would apply to taxable years beginning after December 31, 2025, unless stated otherwise.

I. Provisions Affecting Individual Business Owners / Investors

1. Individual Tax Rate Structure. The Bill would make permanent the individual income tax rate structure established under the TCJA, maintaining the top marginal rate at 37%.
2. State and Local Taxes. The Bill would retain the $10,000 cap on the state and local tax deduction established under the TCJA, but would allow families with income below $400,000 to deduct up to $30,000 in state and local taxes. In addition, the Bill would eliminate the ability of owners of certain electing pass-through entities to receive a deduction for state and local taxes paid by pass-through entities.
3. Estate and Gift Taxes. The TCJA increased the estate and gift tax exclusion from $5 million to $10 million (indexed for inflation until the end of 2025). The Bill would permanently increase the exclusion to $15 million (indexed for inflation starting in 2026).
4. Carried Interests. Although recent comments from President Trump caused concern among fund sponsors, the Bill does not propose any changes to the current carried interest rules.
5. Alternative Minimum Tax. The Bill permanently extends the TCJA’s increased individual alternative minimum tax exemption amounts and exemption phase-out threshold.

II. Provisions Affecting Domestic and Foreign Businesses and Organizations

1. Qualified Business Income Deduction (Section 199A). The TCJA added a provision permitting a 20% deduction for certain qualified business income from pass-through entities. The Bill would make the deduction permanent and increase the deduction from 20% to 23% (lowering the effective rate from 29.6% to 28.49%).
2. Business Interest Expense Deductions (Section 163(j)). Under the TCJA, a deduction for business interest expense is limited to 30% of the taxpayer’s “adjusted taxable income” (i.e., EBIT). The Bill would modify “adjusted taxable income” to be equal to the taxpayer’s EBITDA, thereby increasing the cap on deductibility, effective for tax years beginning after December 31, 2024 and before January 1, 2030.
3. Bonus Depreciation (Section 168(k)). The TCJA provided for 100% bonus depreciation, which has been phased down to 40% for property placed in service in 2025 (and will continue to phase down with no bonus depreciation for property placed in service after 2026). The Bill would temporarily restore the 100% bonus depreciation for qualifying property acquired after January 19, 2025 and placed in service before 2030.
4. Research and Experimental Expenditures (Section 174). Prior to 2022, businesses could fully deduct domestic research and experimental (R&D) expenses; however, beginning in 2022, the TCJA required that these expenses be amortized over five years (or 15 years in the case of R&D conducted outside the US). The Bill would allow immediate expensing of domestic R&D incurred after 2024 through the end of 2029. There was some discussion that immediate expensing would be made retroactive to 2022, but that is not reflected in the Bill.
5. Global Intangible Low-Taxes Income (GILTI) and Foreign-Derived Intangibles Income (FDII). Under the TCJA, the effective tax rates on GILTI and FDII would increase after 2025. The Bill would make permanent the current effective tax rate by maintaining the current deduction amounts.
6. Base Erosion and Anti-Abuse Tax. Under the TCJA, US corporations with annual gross receipts of at least $500 million that make deductible payments to foreign-related parties are subject to a 10% minimum tax (known as the BEAT), which is scheduled to increase to 12.5% in 2026. The Bill proposes to maintain the BEAT rate at 10%.

III. Provisions Affecting Renewable Energy Businesses

1. Clean Electricity Production Credit (Section 45Y) and Clean Electricity Investment Credit (Section 48E). Under the IRA, taxpayers with qualified facilities and energy storage technologies placed in service after December 31, 2024 may qualify for a technology neutral production tax credit (Section 45Y) or investment tax credit (Section 48E). The Bill would introduce a phase-out period for these credits, starting for projects placed in service after December 31, 2028, and eliminates the credits for projects placed in service after December 31, 2031.
2. Zero-Emission Nuclear Power Production Credit (Section 45U). Under the IRA, a tax credit is provided for electricity produced at a qualified nuclear power facility and sold to an unrelated person, for tax years beginning after December 31, 2023 and before January 1, 2033. The Bill introduces a phase-out period for projects placed in service after December 31, 2028 and eliminates the credits for projects placed in service after December 31, 2031.
3. Advanced Manufacturing Production Credit (Section 45X). Under the IRA, a tax credit is provided for taxpayers producing specified solar energy components, wind energy components, inverters, battery components, and critical minerals in the US and selling them to unrelated persons. The Bill eliminates this credit for wind energy components sold after December 31, 2029 and eliminates the credit for all other components sold after December 31, 2031.
4. Transfer of Tax Credits (Section 6418). Under the IRA, taxpayers are able to monetize certain energy-related tax credits by transferring such credits to unrelated parties for cash. The Bill repeals the transferability provision with respect to projects that “begin construction” after the second anniversary of the date that the Bill is enacted.

IV. Final Thoughts

While the One, Big, Beautiful Bill provides significant details as to the Trump administration’s proposed tax package, the negotiation process has just begun. There are still areas of disagreement even among House Republicans (e.g., the salt and local taxes deduction), and additional changes and details are expected as the Bill progresses through the House, Senate, and ultimately reaches President Trump for approval. The tax team at Mintz is closely monitoring the development of the proposals and will provide further updates as the Bill advances. Please reach out to Gregg Benson, Tim Santoli, Ari Feder, or your Mintz relationship attorney if you have any questions regarding the Bill.

For a discussion of the energy implications of the Bill and the subsequent procedural steps leading to enactment, please see the analysis from our colleagues within the ML Strategies Group.

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