Senate to consider bill containing business tax relief and TCJA extensions

ARTICLE | June 01, 2025

Executive summary:

Proposed tax changes, including revenue raisers, are subject to revision as the U.S. Senate takes up a broad taxation-and-spending package in June. In the meantime, the tax changes approved by the U.S. House of Representatives provide businesses and individuals some insight into how the tax landscape may change for 2025 and beyond.

This article will be updated as tax legislation advances in the Senate as part of the budget reconciliation process.

The One Big Beautiful Bill Act moves to the Senate

Potential tax changes, including revenue raisers, are subject to revision as the U.S. Senate takes up broad taxation-and-spending legislation in June.

Businesses and individuals gained some insight into potential tax changes for 2025 and beyond when the U.S. House of Representatives approved the One Big Beautiful Bill Act (OBBBA) on May 22. However, for the OBBBA to become law, the House and the Senate need to approve an identical version of the bill—and the extent to which the Senate may change the House-approved legislation remains to be seen.

The uncertainty is multifaceted. For starters, the political dynamics in the Senate differ from those in the House. Also, Senate Republicans hope to pass their version of the bill with a simple majority through the budget reconciliation process, which requires the legislation to meet strict budgetary, topical and parliamentary criteria.

As the Senate takes up the legislation, expect key discussions to focus on the following tax topics:

• The duration or permanence of business tax provisions, including the tax treatment of expenses for:
  • Research and development
  • Qualified property
  • Business interest
• U.S. international taxation, including:
  • Global intangible low-taxed income (GILTI)
  • Foreign-derived intangible income (FDII)
  • Base-erosion and abuse tax (BEAT)
  • Rules responding to foreign taxes the US government deems unfair
• Clean energy tax credits and incentives
• The deduction for qualified business income for pass-through entities
• The state and local tax deduction limitation (SALT cap)

Another discussion point figures to be the cost of the legislation. The Joint Committee on Taxation estimated that the House-approved tax provisions would add $3.9 trillion to the federal deficit over the next 10 years.

The proposals being considered would:

• Make permanent many provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) before they are scheduled to expire at the end of 2025.
• Restore more favorable tax treatment of various business expenses, including those for qualified property, research and development, and business interest.
• Accelerate the phaseout of most clean energy business tax incentives that have been enacted in recent years, terminate most energy credits for individuals, and phase out credit transferability.
• Respond to certain unfair taxes, which include discriminatory and extraterritorial taxes that a foreign government imposes on U.S. persons or certain foreign entities owned by U.S. persons.

Republican leaders in Congress have earmarked July Fourth as their working deadline for enactment. Work with your tax advisor to stay up to date on legislative developments and to understand how proposals would affect your tax profile.

This article was written by Dave Kautter, Matt Talcoff, Kyle Brown, Ayana Martinez, Ryan Corcoran, Amber Waldman, Alina Solodchikova, Debbie Gordon and originally appeared on 2025-06-01. Reprinted with permission from RSM US LLP.
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