Background

With many of the beneficial tax policies under the 2017 Tax Cuts and Jobs Act set to expire at the end of 2025, it is imperative that the U.S. House of Representatives and U.S. Senate preserve critical tax policies and ensure certainty for thousands of small businesses throughout the construction industry in the United States.

The One, Big, Beautiful Bill Act (H.R.1), contains many ABC-supported priorities that provide critical tax relief to contractors. This legislation would provide certainty to the more than 95% of all American businesses structured as S corporations, partnerships and sole proprietorships. These pass-through businesses employ 62% of the private sector workforce and form the economic backbone of virtually every community nationwide.

As the House and Senate advance their versions of the bill, ABC urges both chambers to include ABC-supported provisions below:

• Small Business Deduction: Provide the pass-through sector crucial relief via a permanent, boosted deduction for qualified business income. Locking in the higher deduction under Section 199A will prevent a significant tax hike in 2026and ensure that ABC members—most of whom are passthrough businesses—can reinvest in their companies, expand their workforce and take on new projects without fear of future tax hikes.
• Estate Tax Relief: Provide permanent estate tax relief at $15M per individual, preserving and protecting family businesses from destructive estate taxes. This provision allows contractors to pass on the businesses they built to the next generation.
• 100% Bonus Depreciation: Renew previously expired immediate expensing via 100% bonus depreciation. This is a powerful incentive for construction businesses to invest in new equipment and technologies.
• R&D Cost Expensing: Permanently allow taxpayers to immediately deduct domestic research or experimental expenditures.
• Expanded 529 Accounts for Skilled Trades Training: Expand 529 plans for all recognized postsecondary credentials as defined by the Workforce Innovation and Opportunity Act. This would support the next generation of craft professionals—ensuring more Americans can pursue rewarding careers in construction.
• Relief From Overregulation and Red Tape: From the inclusion of the ABC-supported REINS Act to reducing 1099 reporting burdens to improving Opportunity Zones, this bill cuts unnecessary red tape and unlocks new growth in communities that need it most.
• Expedited Environmental Reviews: Provide project sponsors a deadline of six months for completing an environmental assessment and 12 months for completing an environmental impact statement, along with protection from judicial and administrative reviews, in exchange for paying 125% of the estimated cost to prepare or supervise the preparation of an environmental review.

While H.R.1 phases out some of the IRA’s clean energy tax credits, ABC urges Congress to also repeal the IRA’s anti-competitive labor policies. ABC believes that the IRA’s bonus credit penalizes employers that believe in fair and open competition and limits opportunities for construction workers who choose not to join a union and instead participate in industry-recognized apprenticeships.

Desired Outcome

Maintaining pro-growth tax policies will be essential to ensuring the economy’s growth. ABC will continue to advocate for the beneficial tax proposals included in the TCJA that will spur economic growth and create jobs throughout the country.