NLBMDA Advocacy Alert:

Senate Passes Reconciliation Tax Package

Earlier today the U.S. Senate passed its revised version of H.R.1, the One Big, Beautiful Bill Act (OBBBA), by a vote of 51-50. The vote followed an all-night “vote-a-rama” where Senate Democrats forced consideration on numerous amendments to challenge divisive provisions in the bill. Vice President J.D. Vance cast the tie-breaking vote after Sens. Susan Collins (R-ME), Rand Paul (R-KY), and Thom Tillis (R-NC) joined Democrats in opposition.

Despite support from many GOP lawmakers, polling and public sentiment indicates the bill remains highly controversial both in Congress and among the general public. Nevertheless, the sweeping reconciliation package includes several provisions that NLBMDA fought hard to include during the legislative drafting process. NLBMDA’s advocacy work on the tax bill began immediately following the 2024 election and in April, NLBMDA members met with lawmakers on Capitol Hill during our annual legislative fly-in to coalesce support for NLBMDA supported provisions.

Key NLBMDA Priorities Included in the Senate Bill:

Full Expensing (100% Bonus Depreciation)

The Senate tax bill retroactively reinstates 100% bonus depreciation for qualified property placed in service after January 19th, 2025. The Senate strengthened this provision by making it permanent tax policy, a change NLBMDA strongly advocated for.

Section 199A 

The Tax Cuts and Jobs Act (TCJA) created the Section 199A deduction to ensure pass-through businesses received tax treatment comparable to the newly lowered corporate rate. The Senate bill would make this deduction permanent for pass-through entities.

Housing Tax Credit:

The Senate Tax package proposes a new 12.0 percent Housing Credit allocation increase that would be permanent. Similar to the House bill, the Senate proposes lowering the bond test threshold from 50% to 25%. Economic forecasters have estimated that the revised Senate language would double the projected impact over the next decade to over 1 million new affordable homes.

State and Local Tax (SALT) Deduction: 

Currently, the SALT deduction is capped at $10,000. The Senate bill would raise the cap to $40,000 starting in 2025, with phaseouts beginning for individuals earning more than $500,000. Additionally, the Senate version strengthens the deduction for pass-through businesses by removing a House provision that would have limited their ability to fully utilize the deduction. 

Workforce Development:

The Senate bill includes language from the Freedom to Invest in Tomorrow’s Workforce Act, legislation supported by NLBMDA. This provision expands the flexibility of Section 529 savings plans to cover more workforce training and credentialing opportunities in the skilled trades.

For more information, read our earlier communication recapping the key distinctions between the provisions in the House bill versus the Senate bill.

Next Steps:

As a reminder, the Senate and House must agree on the same bill to ultimately pass for President Trump’s signature into law. Speaker Mike Johnson (R-LA) has restated his commitment to passing the Senate’s version of the bill to meet a self-imposed July 4^th deadline. NLBMDA will be publishing more information in the weeks to follow breaking down the impact OBBBA will have on the LBM industry.

NLBMDA supported provisions in the Senate legislative text can be found throughout the bill below:

• Pg. 222 – Sec. 70105 (Section 199A permanence)
• Pg. 231 – Sec. 70106 (Estate tax reform)
• Pg. 249 – Sec. 70120 (SALT cap increase)
• Pg. 285 – Sec. 70413/70414 (529 savings modifications)
• Pg. 302 – Sec. 70301 (Full Expensing)
• Pg. 428 – Sec. 70422 (Low-Income Housing Tax Credit expansion)

For questions, contact Matthew Delaney, NLBMDA’s Government Affairs Coordinator at mdelaney@dealer.org

Interested in learning more about how to become an NLBMDA Federal Advocacy Sponsor? Contact Jonathan Paine, NLBMDA’s President and CEO at jonathan@dealer.org.