Companies Need Certainty and the Legislation Provides It

Gene Marks | July 9, 2025

(The Washington Times) — The big, beautiful tax and spending bill signed into law last week by President Trump has its pros and cons.

On the downside, there’s no significant debt reduction. It misses the opportunity to seriously reform entitlements. Its provisions for sales and local tax, Medicare and child care have left some disappointed. And there’s the usual pandering to special interests, tipped workers and elderly voters. But none of this is new. And, like any major piece of legislation, there are always going to be winners and losers.

For this bill, the big winner is clear. It’s small business, and for a reason that is very unusual in Washington: permanence.

The “pass-through” deduction, which allows the owners of eligible businesses — partnerships, S-corporations, etc. — to only include 80% of their business income on their individual tax returns is a major help. More than 90% of U.S. businesses file this way and if this deduction expired this year, all of them — my business included — would be facing much higher tax bills in 2026. This provision is now permanent.

Allowing businesses to take “bonus depreciation” in the first year is also significant. This means that a small business can buy eligible machinery, equipment, capital equipment, furniture, hardware, software and automobiles, and deduct 100% of the cost of these purchases in the year they’re put into service, even if the purchase is financed. This provision, which is always extended, has been made — gasp — permanent!

Enabling businesses to deduct research and development costs in the year they’re incurred rather than have to amortize them over a five-year period will also encourage more businesses to invest in the future. And these are not just pharmaceutical makers. I have a number of clients in the manufacturing, distribution, construction and service industries that have taken advantage of this deduction in the past, as they’ve tested new products and performed market research. This provision expired in 2022. Now, it’s back — and back forever.

Finally, increasing the estate tax exemption to $15 million individually ($30 million for joint filers) is also a major boost to business owners who have been teetering on selling their business. No one wants to give away 40% of the results of their decades-long hard work to the federal government, and this exemption makes it easier for business owners to pass their assets on to the next generation or sell their businesses to outsiders. Look for mergers and acquisitions transactions to boom in the coming years thanks to this provision now being permanent.

In the 30-plus years that I’ve been a practicing certified public accountant, I’ve seen countless forms of legislation that have merely extended these rules, again and again and again. Extending without permanence creates uncertainty. And uncertainty inhibits investment and growth. Managing your spending based on whether and when a significant tax law is going to expire adds complexity and challenges. Will this benefit still be around next year? Should we do this now? Never?

Thanks to this legislation, these debates go away. No more questions about whether a major provision is going to be effective in the future. Now that these rules have been made permanent, businesses can make serious, significant investments for the long term.

They will be better able to plan out their capital spending. They can extend and bolster their research and development programs. They no longer have to revisit their corporate structures. The lines have been drawn, the definitions set. The rules are certain and permanent. Tax planning is now easier.

Running a business in 2025 isn’t easy. Every client I speak with grapples with uncertainty. A fluctuating economy. Changing regulations. New tariffs. Higher costs of borrowing. Higher costs of spending. They seek a more reliable outlook so they can make longer-term decisions so that their businesses not only remain sustainable, but grow and provide a continuing livelihood for them and their employees.

The more permanence in their lives, the easier it is for them to gauge risk and make better decisions. When it comes to a few major tax provisions, the Big Beautiful Bill does this.

Gene Marks runs The Marks Group PC, a financial and technology consulting firm near Philadelphia.