President Trump signed his One Big Beautiful Bill (OBBB) into law at a White House ceremony July 4th, following hours of around-the-clock debate and arm-twisting in both chambers of Congress.
The bill extends tax cuts first enacted in 2017, many of them permanently, and creates some new temporary tax breaks for items that President Trump campaigned on, like no taxes on tips or overtime. The bill also increases funding for border security and defense, along with a few other items. To partially offset the costs of these measures, the bill makes changes to several social welfare programs, most notably Medicaid and the Supplemental Nutrition Assistance Program (SNAP) that will likely save money by either removing people from the programs or shifting costs onto the states. The bill also rescinds or repeals numerous clean energy and climate provisions in law, many of which were enacted in former President Biden’s 2022 Inflation Reduction Act (IRA). Altogether, the Congressional Budget Office projects that the bill will increase federal deficits over the next 10 years by nearly $3.4 trillion.
The bill includes a number of provisions that impact the CRM industry, albeit in mainly indirect ways. Here are some of the highlights:
Taxes
The legislation contains about $4.5 trillion in tax cuts for both individuals and businesses. It makes permanent most of the tax cuts and lower marginal rates in the 2017 tax bill, which would have expired at the end of this year without congressional action.
Of most relevance to the CRM industry, the bill permanently extends a deduction for pass-through businesses like S corporations and partnerships – how a large number of CRM firms are organized – keeping it at 20 percent. Without this provision, tax rates on pass-throughs would increase next year.
The bill has a multitude of other tax provisions that will impact everyone:
Individual Taxes: The bill keeps individual tax rates at the lower levels that were first enacted in 2017 but slated to expire at the end of the year. It also permanently boosts the standard deduction by $750 ($1500 for couples), increases the federal child tax credit from $2000 to $2200 and creates new “Trump accounts” for children into which the government may make a $1000 contribution per child.
For those living in places with higher state or local taxes, the bill temporarily increases the cap on state and local tax deductions to $40,000; in 2017, Congress limited the previously unlimited individual state and local tax (SALT) deduction at $10,000. The higher cap will be in place for 5 years.
The bill also adds a number of temporary tax breaks on which President Trump campaigned in 2024, including deductions on tips, overtime and car loan interest payments, as well as a temporary $6000 deduction for adults 65 and older who earn no more than $75,000 a year.
Business Taxes: The bill extends numerous business-related tax cuts first passed in 2017, including:
- Bonus depreciation: The bill permanently extends the Sec. 168 additional first-year (bonus) depreciation deduction. The allowance is increased to 100% for property acquired and placed in service on or after Jan. 19, 2025, as well as for specified plants planted or grafted on or after Jan. 19, 2025.
- Research-and-development expenses: The bill allows taxpayers to immediately deduct domestic research or experimental expenditures paid or incurred in tax years beginning after Dec. 31, 2024. However, research or experimental expenditures attributable to research that is conducted outside the United States will continue to be required to be capitalized and amortized over 15 years.
Public Lands and Natural Resources
The bill requires the Department of the Interior to accelerate energy projects on public lands and offshore waters, including:
- Requiring Interior to renew holding quarterly oil and gas lease sales on public lands in nine Western states (including Alaska) for the next 10 years, including requiring BLM to offer not less than 50 percent of available parcels nominated by in the industry for development.
- Requiring Interior’s Bureau of Ocean Energy Management (BOEM) to hold no fewer than two lease sales every year for 15 years in the Central and Western planning areas of the Gulf of Mexico.
- Requiring BOEM to hold at least six offshore oil and gas lease sales in the Cook Inlet Planning Area in Alaska, with a minimum of one lease sale in each calendar year from 2026 to 2032, with each sale offering at least 1 million acres.
- Repealing a 2022 requirement for the payment of royalties on all methane extracted from federal onshore and offshore oil and gas leases.
- Requiring BLM to hold at least four lease sales over the next 10 years in the Coastal Plain Oil and Gas Leasing program, comprising at least 400,000 acres in each sale and directing 50 percent of the bonus, rental, and royalties income generated from the oil and gas program to be paid to the state of Alaska for 2025 through 2033 and 70 percent paid to Alaska beginning in 2034.
- Requiring at least five lease sales over the next 10 years in the National Petroleum Reserve, comprising at least 4 million acres in each sale with 70 percent of the proceeds of the activity being paid to the state of Alaska beginning in 2034.
- Restoring coal leasing activities conducted prior to the Biden Administration and requiring Interior to make available for leasing at least 4 million acres of public lands with known coal reserves in the 48 contiguous states and Alaska (excluding certain protected public lands such as National Monuments and National Parks).
- Requiring the U.S. Forest Service to annually sell at least 250 million board feet greater than the timber sold in the previous fiscal year through 2034 on forest reserves created from the public domain.
- Requiring BLM to sell an annual quantity of timber that is 20 million board feet greater than was sold in the previous fiscal year through 2034.
- Requiring 25 percent of rentals, fees and charges for renewable energy projects on public lands to be paid from the U.S. Treasury to the state where the project is located and another 25 percent to the counties where the revenue was generated.
The bill also creates an optional permitting fee mechanism whereby projects can access expedited timelines for National Environmental Policy Act (NEPA) reviews by paying a fee of 125 percent of the costs to prepare the review. An environmental impact statement (EIS) must be completed within one year, and an environmental assessment (EA) must be completed within six months.
One provision dropped from the final bill: requiring selling public lands. Although Sen. Mike Lee (R-UT), the Chairman of the Senate Energy and Natural Resources Committee, had proposed a provision to require the government to sell as many as 3.3 million acres of public lands across 11 Western states to build housing, opposition to the idea from other Western Senators forced him to drop it.
Spending Cuts
While the bill’s proposed changes to social welfare programs like Medicaid and food stamps have garnered the most attention, the bill also cuts a number of energy and climate programs that Congress enacted as part of the 2022 Inflation Reduction Act (IRA) and terminates a number of clean energy tax incentives.
Notably, the bill rescinds funding for a number of National Park Service programs, including Public Lands Conservation and Resilience, Public Lands Conservation and Ecosystem Restoration and extra funding for hiring National Parks Service employees.
In addition, the bill rescinds unspent funding the IRA gave to the Environmental Protection Agency (EPA) for development of efficient, accurate, and timely reviews for permitting and approval processes through the hiring and training of personnel, the development of programmatic documents, the procurement of technical or scientific services for reviews, the development of environmental data or information systems, stakeholder and community engagement, the purchase of new equipment for environmental analysis, and the development of geographic information systems and other analysis tools, techniques, and guidance to improve agency transparency, accountability, and public engagement.
The list of other programs whose funding the bill rescinds include:
- The Greenhouse Gas Reduction Fund
- The Tribal Energy Loan Guarantee Program
- Transmission Facility Financing
- Grants to Facilitate the Siting of Interstate Electricity Transmission Lines
- Interregional and Offshore Wind Electricity Transmission Planning, Modeling, and Analysis
- Advanced Industrial Facilities Deployment Program
- HUD’s Green and Resilient Retrofit Program
- Environmental and Climate Justice Block Grants
- Endangered Species Act (ESA) Recovery Plans
- Low-Emissions Electricity Program
- Funds for addressing air pollution at schools
- GSA funding for green buildings conversion for federal buildings
- FHWA Neighborhood Access and Equity Grant Program
Other Provisions
Other provisions that relate to historic preservation or CRM include:
- Heroes Garden: The bill provides $40 million to establish Trump’s “National Garden of American Heroes.”
- Celebrating America’s 250th Anniversary. The bill provides up to $150 million for events and celebrations in observance of the country’s 250th anniversary held on public lands.
- Air Traffic Control (ATC): The bill includes $12.52 billion in total federal spending for ATC modernization.
- Immigration and Border Security: The bill provides $45 billion to expand U.S. detention capacity for immigrants whose removal is pending, $5 billion for U.S. Customs and Border Protection facilities, and $46 billion for construction of the U.S.-Mexico border wall
If you have any questions about the legislation, please contact ACRA at amanda@acra-crm.org.