NLBMDA Advocacy Alert:

Congress Passes Reconciliation Tax Package

Today, the U.S. House of Representatives passed the Senate’s version of the of the One Big, Beautiful Bill Act (OBBBA) on a vote of 218-214. All Republicans voted in favor of the bill with the exceptions of Reps. Brian Fitzpatrick (R-PA) and Thomas Massie (R-KY) who sided in opposition with Democrats. The House’s adoption of the Senate’s bill results in the legislation being sent to President Trump for signature into law, expected to take place tomorrow, July 4. A highly controversial bill, OBBBA has drawn criticism for its measures that reduce funding for Medicaid, social programs and green energy incentives.

While NLBMDA has not taken an endorsement position on the entirety of the divisive legislation, the reconciliation bill served as a legislative vehicle to deliver a series of historic victories for NLBMDA on behalf of the industry. 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.

NLBMDA Victories Included in the Bill:

Full Expensing (100% Bonus Depreciation)

OBBBA 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. OBBBA makes this deduction permanent for pass-through entities.

Housing Tax Credit:

The Tax package proposes a new 12.0 percent Housing Credit allocation increase that would be permanent. OBBBA lowers the private activity bond test threshold from 50% to 25%. Economic forecasters have estimated that this provision will lead to the creation and restoration of over 1 million affordable homes over the next decade.

State and Local Tax (SALT) Deduction: 

The SALT deduction is capped at $10,000. OBBBA raises the cap to $40,000 starting in 2025, with phaseouts beginning for individuals earning more than $500,000. Additionally, OBBBA 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:

OBBBA 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.

Estate "Death" Tax:

OBBBA locks in permanent death tax relief along with many other positive tax provisions for America's family businesses.

OBBBA increases the unified estate, gift, and GST exemptions to $15 million per individual and $30 million per couple, indexed for inflation. Importantly, this change is made permanent, which means we will no longer face a fiscal cliff where the exemption is scheduled to automatically snap back. We have made great progress over the past two decades on the death tax (in 2001, the exemption was $675,000 and the rate was 55%) and this latest change ushers in the least-burdensome death tax policy since we constituted the Family Business Coalition.

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.