2025 Tax Bill Extends Capital Lifelines to Companies Investing in America

Bill Fuels American Business Growth with Accelerated Tax Deductions

Businesses looking to grow in America will get a helping hand if Congress passes the tax bill, a compilation of President Trump’s top priorities. The version that the House Budget Committee narrowly passed on May 18 contains three pro-growth provisions for businesses—none of which have drawn significant objections from either party. The absence of political ire bodes well for companies in search of financial lifelines to navigate higher tariffs and interest rates.

Greater Eligibility for “Small Manufacturing Businesses”

This provision enables more businesses to qualify for simpler accounting methods by dramatically increasing the gross receipt qualification for “small manufacturing businesses.” Eligibility would expand from $25 million to $80 million in 2025 and $100 million in 2026, enabling more businesses to qualify for:

Cash Method of Accounting: Businesses can record income and expenses when cash changes hands, simplifying bookkeeping and cash flow management.
Exemption from Business Interest Deduction Caps: More companies can fully deduct interest expenses, which is vital for those using debt financing.
Simpler Inventory and Capitalization Rules: Reduced administrative burden and compliance costs due to less stringent tracking requirements.

100% Immediate Deduction for New Factories

The second manufacturing friendly provision in the bill would allow a 100% immediate deduction of the adjusted cost basis for U.S. factory real estate. This is a significant acceleration of the current 39-year depreciation schedule for nonresidential properties. Fully deducting the cost of a new factory upfront makes American manufacturing investments more attractive. More factories encourage on-shoring and more jobs for Americans as manufacturing attempts a comeback in the U.S.

Immediate R&D Expensing

Finally, the bill proposes a significant incentive for all companies investing in domestic research and development by allowing immediate deduction of related expenses instead of amortizing these costs over a 5-year period. This immediate tax relief will benefit any business pursuing R&D in the U.S. from pharmaceuticals to technology companies. The accelerated deduction encourages more privately funded investment in U.S. research, which fosters American job creation and technological advancement.

QMS Helps American Businesses Leverage These Lifelines

The survival of these pro-growth provisions would super-charge domestic innovation and job growth, particularly in manufacturing. An AI-infused QMS (quality management system) provides the technology infrastructure for accurately identifying, documenting, and substantiating claims for the bill’s tax deductions and credits.

✅ Robust Documentation for Deductions and Credits

R&D Tax Credit: R&D tax credits require meticulous documentation of qualifying activities, including:

Experiments and prototypes: A QMS often requires detailed records of design iterations, testing, and results, which are crucial for proving R&D activities.
Personnel involved: QMS defines roles and responsibilities, making it easier to track which employees (and their time) were directly engaged in R&D activities.
Expenditures: QMS processes for procurement and expense tracking can ensure all qualifying expenses related to R&D are accurately captured.
Project management: QMS frameworks can generate the product development project plans, reports, and change logs needed to substantiate R&D claims.

✅ 100% Immediate Expensing for Factories/Production Assets

A QMS ensures proper asset tagging, maintenance records, and operational logs for new factory equipment and improvements. This documentation verifies the acquisition date, in-service date, and the specific use of the assets, which is critical for claiming immediate expensing.
It can help track the specific type of investment and its direct relation to production, which would be essential for demonstrating eligibility.

✅ Data Management & Traceability

Centralized Information: QMS centralizes data (invoices, labor, project reports) to make tax claim information easy to locate and analyze.
Traceability: QMS emphasizes tracing expenditures to specific qualifying activities or assets, providing evidence for the IRS.

✅ Continuous Improvement for Optimized Benefits

Identifying Opportunities: QMS’s continuous improvement helps proactively find activities qualifying for new tax benefits.
Adapting to Changes: QMS’s flexibility enables businesses to quickly adjust documentation to new tax laws and maximize opportunities.

Companies can use QMS to leverage the bill’s financial lifelines for business innovation and expansion despite slowdowns from tariff uncertainty.

Learn how Intellect can help or contact us with questions.