The One Big Beautiful Bill Act (OBBBA) contains wide-ranging tax changes that could significantly impact manufacturers. Key provisions in the Act include:
Cost of capital: 100% bonus depreciation is now permanent and new incentives for qualified production property aim to boost expansion, productivity, and supply chain strength.
Debt: Restored favorable interest deductibility under section 163(j) improves the tax efficiency of debt-financed investments and may enhance access to capital.
Research and development: Immediate expensing of U.S.-based R&D costs and certain U.S. international tax reforms may free up capital for innovation and increase the value of domestic R&D tied to foreign sales.
Entity structure: Expanded small business stock exclusions and changes to international tax rules may influence entity choice, after-tax cash flow, and global tax strategy.
Global footprint and supply chain: Reforms to U.S. international taxation, along with ongoing tariff pressures and OECD Pillar Two implications, require manufacturers to reassess sourcing, trade flows and tax exposure across jurisdictions.
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