How tax changes in the One Big Beautiful Bill Act affect capital markets organizations

The One Big Beautiful Bill Act (OBBBA) changes the tax landscape for capital markets organizations. From the return of full R&D expensing to the permanent extension of bonus depreciation to the tightening of meal expense deductions, the bill introduces opportunities and challenges that could affect how broker-dealers, trading platforms and other businesses manage taxable income, cash flow, and entity structure.

While some provisions offer relief, others introduce friction—especially for firms relying on workplace perks or navigating SSTB restrictions. This article breaks down key provisions and the corresponding implications for capital markets organizations and leaders.

Capital markets organizations face a combination of enhanced tax benefits and business challenges stemming from tax provisions in the OBBBA. Now that there is a federal tax policy roadmap for the foreseeable future, here is a closer look at key OBBBA tax items and their implications for capital markets organizations.

Tax treatment of R&D expenses

The OBBBA makes domestic R&D costs fully deductible on a permanent basis, starting with 2025. Foreign R&D spending is still amortized over 15 years.

Qualified small businesses may be able to apply full expensing retroactively to accelerate deductions for expenses currently being amortized.

Learn more about the technical changes to the tax treatment of R&D expenses and the implications for businesses.

Bonus depreciation

The OBBBA introduces significant changes to 100% bonus depreciation, making it permanent for most property acquired after Jan. 19, 2025, and establishing a new temporary allowance for qualified production property.

Learn more about the technical changes to bonus depreciation and implications for businesses.

Business interest expense deduction limitation

The OBBBA returns to the original Tax Cuts and Jobs Act (TCJA) calculation for business interest expense limitations. It allows the addback for depreciation, depletion and amortization to the adjusted taxable income calculation, effectively allowing deductions up to 30% of earnings before interest, taxes, depreciation and amortization (EBITDA). This provision is permanent.

Learn more about the technical changes to the business interest expense limit under section 163(j) and the implications for businesses.

SALT cap and PTET

The OBBBA raises the SALT cap to $40,000 beginning in 2025 through tax year 2029, after which it will revert to $10,000. The limitation is phased down for taxpayers with modified adjusted gross income (AGI) over $500,000 for the same period. Both the limitation and the modified AGI threshold are increased by 1% each year through 2029.

Meanwhile, the OBBBA makes no changes to the deductibility of PTET by a pass-through entity, what types of taxpayers can make state PTET elections, or the ability of taxpayers to make state PTET elections.

The final legislation omitted some proposals that would have severely restricted the ability of certain financial services businesses to benefit from PTET regimes. The omitted proposals could have had significant negative impacts on after-tax cash flows for business owners.

Learn more about the technical changes to the SALT cap and the implications for taxpayers.

Employer-provided meals

The OBBBA modifies section 274(o) to disallow 100% of the deduction for certain employer-provided meals beginning in 2026. This includes meals served at employer-operated eating facilities and those provided to employees “for the convenience of the employer”. Although the OBBBA introduces exceptions for businesses that sell food and beverages to customers and for certain fishing industry operations, those carveouts are narrowly drawn and unlikely to apply to capital markets firms.

Learn more about the technical changes to taxes on employer-provided meals and the implications for employers.

Exclusion of gain on the sale of qualified small business stock

The OBBBA expands the gain exclusion rules for the sale of qualified small business stock (QSBS), mainly through the following three changes applicable to QSBS issued after July 4, 2025:

• Provides a tiered exclusion: Allows taxpayers a 50% exclusion for shares held at least three years, a 75% exclusion for shares held at least four years, and a 100% exclusion for shares held at least five years.
• Increases per-issuer limitation: Raises the per-issuer gain exclusion cap from $10 million to $15 million (indexed for inflation) while still leaving available the 10-times-basis limit if greater.
• Increases corporate-level gross asset threshold for qualification: Increases the gross asset threshold from $50 million to $75 million (also indexed form inflation).

Learn more about the technical changes to the exclusions for small business stock and the implications for businesses.

Qualified business income deduction

The OBBBA makes permanent the QBI deduction at the current 20% rate. Certain pass-through entities are eligible. This was a temporary provision in the TCJA that was set to expire after 2025.

Learn more about the technical changes to the QBI deduction and the implications for businesses.

U.S. international tax reforms

American competitiveness: Tax rates for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI) were initially designed to encourage U.S. companies to keep intangible assets and the associated profits within the United States. Together, they aim to balance American competitiveness globally with the federal government’s need for revenue.

• The OBBBA maintains those concepts but modifies FDII and GILTI by:
• Modifying the calculations to remove exclusions based on fixed asset investment and soften expense allocation requirements
• Renaming to foreign-derived deduction eligible income (FDDEI) and net controlled-foreign-corporation-tested income (NCTI), respectively

Profit shifting and base erosion: The base-erosion and anti-abuse tax (BEAT) is a minimum tax designed to prevent large multinational corporations from avoiding U.S. tax liability by shifting profits abroad. The OBBBA permanently lowered the scheduled BEAT rate from 12.5% to 10.5% and eliminated the unfavorable treatment of certain credits that could be applied against regular tax liabilities after Dec. 31, 2025.

Learn more about U.S. international tax reforms in the OBBBA.

Adapting to OBBBA changes: Next steps for capital markets organizations

OBBBA tax provisions represent significant opportunities for capital markets organizations, but they come with eligibility rules and planning considerations. Companies can work with their tax advisor to align their business objectives to OBBBA changes by taking the following steps:

• Talk to your tax advisor to assess how business tax provisions align with your business objectives.
• Review your capital investment, R&D and financing plans to align with the new incentives.
• Model your tax position under the new rules to identify savings opportunities. Leveraging tax technology can enhance modeling precision, streamline compliance workflows, and improve visibility across federal, state and international tax positions—ultimately supporting more agile and informed decision-making.
• In any transaction, work with an M&A specialist on either the buy- or sell-side when material attributes exist on the target’s balance sheet.