How the “One Big Beautiful Bill” Impacts Construction Businesses

Massive tax changes are here and construction businesses that act early stand to save the most. The One Big Beautiful Bill (OBBB), signed into law on July 4, 2025, reshapes how contractors, developers and subcontractors handle everything from equipment purchases to project cash flow and succession planning.

Some provisions already apply for 2025, while others roll out in 2026. That means the decisions you make this year could have long-term tax and financial consequences for your business.

This guide, written specifically for the construction industry, breaks down the 12 most important tax provisions and explains how to prepare. Key reforms include:

  • Capital Investments
    • 100% bonus depreciation is here to stay, allowing you to fully expense qualifying equipment and property in the year of purchase.
    • Section 179 expensing limits have increased, giving contractors more flexibility for vehicles, software and machinery.
  • Residential & Project Accounting
    • New rules for residential construction contracts let larger multi-unit projects defer income until completion—easing cash flow pressures.
    • Special depreciation for production-related property encourages investment in U.S.-based facilities.
  • Business Structures & Financing
    • Permanent 20% pass-through deduction for S corps, partnerships and sole proprietors ensures long-term tax relief.
    • More deductible interest expense for capital-intensive businesses like construction firms reliant on financing.
  • Succession & Ownership
    • Higher estate and gift exemptions reduce the risk of forced sales when passing ownership to the next generation.

Taxes are one of the largest expenses in construction and one of the best opportunities to improve profitability if you plan ahead. Contact an Adams Brown construction advisor to discuss further.

Download the full tax guide to learn more.