On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBB) into law, ushering in a transformative era for American tax policy. This legislation carries far-reaching implications for construction business owners—from capital investment strategies and workforce compensation to long-term succession planning. This industry-focused summary outlines the provisions most relevant to construction companies and how business leaders can strategically plan around them.

Key Business Provisions Affecting Construction

1. 100% Bonus Depreciation under Section 168(k)

• Provision Overview: The bill permanently extends 100% bonus depreciation for qualified property acquired and placed in service on or after January 19, 2025. It also expands eligibility to include more types of production equipment. This provision is especially relevant to construction firms investing in heavy machinery, vehicles, and tools.
• Planning Considerations for Construction Owners: Review capital budgets and align major equipment purchases with the new effective date to qualify for immediate expensing. Engage a tax advisor to confirm asset eligibility and to ensure compliance with placed-in-service documentation requirements.

2. Enhanced Section 179 Expensing

• Provision Overview: The Section 179 deduction cap rises to $2.5 million, with a phaseout beginning at $4 million. This offers expanded capacity to expense a broader range of business property.
• Planning Considerations for Construction Owners: Plan asset acquisitions to remain under the phaseout limit. Prioritize the timing of purchases and asset deployment to optimize deductions, especially for mid-sized contractors scaling operations.

3. Section 199A Qualified Business Income (QBI) Deduction Made Permanent

• Provision Overview: Section 199A’s 20 percent deduction on qualified business income is permanent. Expanded thresholds and a $400 minimum deduction increase accessibility.
• Planning Considerations for Construction Owners: Analyze entity structure and how partner compensation affects QBI eligibility. Consider adjusting salaries, distributions, or retirement plan contributions to manage income within optimal thresholds.

4. Above-the-Line Dedication for Overtime Compensation

• Provision Overview: Workers may claim an above-the-line deduction of up to $12,500 for qualified overtime compensation from 2025 through 2028. The deduction applies to overtime pay that exceeds regular hourly rates and is subject to income-based phaseouts.
• Planning Considerations for Construction Owners: Use this provision to support workforce retention and recruitment. Emphasize the tax benefit as part of total compensation discussions and ensure accurate payroll reporting to help employees qualify.

5. Deduction for Personal Auto Loan Interest

• Provision Overview: Taxpayers may deduct up to $10,000 in interest paid on loans for U.S.-assembled vehicles purchased between 2025 and 2028 for personal use.
• Planning Considerations for Construction Owners: Encourage employees to verify vehicle eligibility before purchase. Businesses might explore partnerships with dealers or lenders to support employee access to compliant vehicle financing.

6. Charitable Deduction for Non-Itemizers

• Provision Overview: Individuals who do not itemize deductions may now deduct up to $2,000 (joint filers) in charitable donations.
• Planning Considerations for Construction Owners: Promote participation in giving initiatives by offering match programs and year-end reporting support. This may also enhance employee engagement and community goodwill.

7. Clean Energy Credit Phaseouts

• Provision Overview: Several major clean energy credits—including Sections 25C, 25D, 45L, 30C, and 30D—are terminated beginning as early as September 30, 2025, with many fully expiring by June 30, 2026. This affects both residential and commercial building incentives.
• Planning Considerations for Construction Owners: Builders planning to incorporate energy-efficient components into projects should accelerate design and installation timelines to ensure eligibility. Work closely with suppliers and subcontractors to document qualifying expenditures and meet installation deadlines.

8. International Tax Changes: Net CFC Tested Income and BEAT

• Provision Overview: The bill renames and revises key international provisions. GILTI is renamed Net CFC Tested Income (NCTI), and FDII becomes Foreign-Derived Deduction Eligible Income (FDDEI). The BEAT rate is fixed at 10.5% beginning in 2026, replacing the previously scheduled increase to 12.5%.
• Planning Considerations for Construction Owners: Contractors operating internationally or sourcing materials from overseas should review foreign ownership structures and intercompany payments. Conduct tax modeling to determine how the new rules alter effective tax rates and explore restructuring if necessary.

Strategic Moves Ahead for Construction Leaders

The One Big Beautiful Bill Act offers significant planning opportunities for construction firms. From equipment purchasing and entity structuring to employee engagement and tax benefit education, this legislation creates avenues to reduce liability and boost profitability. Business owners should act quickly to align their strategies and operations with the law’s provisions for long-term success.