On Saturday night, the U.S. Senate voted 51–49 to advance the "One Big Beautiful Bill"—a massive legislative package that includes restoring 100% R&D expensing under Section 174.
While this wasn’t a final vote, it was a clear signal: lawmakers are moving closer to reversing a tax change that has impacted innovation and investment across industries.
So what actually happened—and what needs to happen next?
Understanding the Senate’s Procedural Vote
A procedural vote means the Senate agreed to begin formal debate on the bill. It does not enact any law. But it’s the first—and necessary—step toward final passage. Alongside the vote, senators released the 940-page bill draft, confirming that R&D expensing is on the negotiating table.
This bill is especially notable because it proposes retroactive relief back to 2022 for small businesses, defined as those with less than $31 million in average annual gross receipts.
What Happens Next Before It Becomes Law
Here’s the path this bill must follow before it can deliver real change for tax planning and credit recovery:
- Senate Debate and Amendments
Formal floor debate begins today with a vote-a-rama session starting at 9 a.m., where senators will have the opportunity to propose and vote on a series of amendments. Provisions related to R&D expensing, Section 179D, and the SALT cap may all be subject to revision during this process.
- Final Senate Vote
Following the amendment process, a final Senate vote could occur as early as this week. With the self-imposed July 4th deadline still in play, the legislative calendar is tight.
- House Review or Reconciliation
If passed, the bill moves to the House of Representatives. Because the Senate version differs from the House-passed bill, the House will need to approve the changes or begin reconciliation negotiations.
- Presidential Signature
Once both chambers agree on a final version, the bill is sent to the President for signature.
Why This Matters for R&D Planning and Section 174 Compliance
The momentum behind R&D expensing is the strongest it’s been in years. For businesses impacted by the 2022 shift requiring amortization of research expenses, the proposed changes could provide meaningful relief.
For small businesses, the current draft includes retroactive application to 2022 and 2023—potentially enabling refunds or reduced tax liability based on previously deferred expenses.
For larger businesses, while retroactivity is not available, permanent full expensing would apply moving forward. In the interim, the bill includes accelerated amortization provisions, designed to ease the transition back to full expensing and improve short-term cost recovery.
A Few Key Takeaways from the Current Bill Draft:
- Permanent R&D expensing would restore immediate deductions for qualified research costs.
- Retroactive provisions allow small businesses to apply this benefit to 2022 and 2023—offering near-term cash flow opportunities.
- Accelerated amortization options give larger businesses faster access to deductions until full expensing becomes effective.
- Temporary SALT cap increase raises the deduction limit to $40,000 through 2030, reverting back to $10,000 after—a potentially meaningful planning window for high-income individuals and pass-through owners in high-tax states.
What Business Leaders Should Be Doing Now
The bill isn’t law yet—but waiting isn’t the best course of action. Strategic tax planning starts before the ink dries. Here's what you can do right now:
- Evaluate past R&D activity (2022–2024) in case retroactive expensing becomes available.
- Prepare dual tax scenarios—one under the current rules and one assuming this bill passes.
- Review project timelines for energy-efficient construction, as Section 179D changes may affect longer-term planning.
- Stay informed—this week may reshape tax policy for years ahead.
Final Thought
This weekend’s vote marks a meaningful step forward for pro-innovation tax policy. The legislative process is complex—but the direction is positive.
For business leaders navigating Section 174 compliance and future R&D strategy, now is the time to anticipate, model, and prepare.
ABGi-USA is closely monitoring each development and will continue tracking the progress of the One Big Beautiful Bill until it is signed into law by President Trump.
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