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How tax changes in the One Big Beautiful Bill Act affect media companies

Media firms have new tax tools for innovation and scale

September 02, 2025
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Business tax Tax policy Artificial intelligence Media & entertainment

Executive summary: Tax relief for media companies

The One Big Beautiful Bill Act (OBBBA) gives media companies new flexibility to invest in innovation, scale production, and optimize global operations. More favorable tax treatment of R&D and capital investment supports development of content platforms, audience analytics, and immersive experiences. Expanded interest deductions and gain exclusions may improve access to financing and attract earlier-stage investment.

For media companies with international reach, changes to how foreign earnings and intangible assets are taxed could prompt reassessments of where content is developed, hosted and monetized. With a clearer tax policy in place, media executives can make more informed decisions about where to invest, how to structure operations, and how to manage global content and revenue streams.

Media companies 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 media companies.

Business interest expense deduction limitation

The OBBBA returns to the original Tax Cuts and Jobs Act 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.

What it means for media companies

Media companies often rely on financing to fund acquisitions, expand content libraries, or invest in new distribution channels. Restoring the EBITDA-based limitation allows more generous interest deductions, which can improve after-tax cash flow and make debt financing more attractive—especially for firms with substantial depreciation from studio assets or digital infrastructure.

This change may support growth strategies, such as acquiring niche content producers or launching new streaming platforms. Media companies should revisit their financing models to assess how the expanded deduction affects their cost of capital and investment returns.

Tax treatment of R&D expenses

The OBBBA makes domestic research and development 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.

What it means for media companies

Innovative media companies investing in such initiatives as digital platforms, content delivery technologies, and audience analytics stand to benefit from the full deductibility of domestic R&D. Whether developing proprietary streaming algorithms, immersive user experiences, or AI-driven personalization tools, the ability to expense these costs immediately improves cash flow and shortens the cost recovery period on innovation. This change supports faster iteration and experimentation in a sector where consumer preferences shift rapidly.

For smaller media firms, retroactive expensing could unlock deductions for previously amortized development costs—such as custom content management system (CMS) platforms or interactive content engines. These companies should revisit their R&D accounting to identify opportunities for accelerated deductions, which can free up capital for creative production, licensing or platform enhancements.

Bonus depreciation

The OBBBA introduces significant changes to 100% bonus depreciation, making it permanent for most property acquired after January 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.

What it means for media companies

Media companies investing in assets such as production equipment, studio infrastructure, or digital content delivery systems may benefit from permanent bonus depreciation. This may reduce taxable income and improve liquidity—especially helpful for firms scaling up video production, expanding broadcast capabilities, or upgrading post-production workflows.

The temporary allowance for qualified production property could also apply to companies manufacturing physical media or building proprietary content pipelines. Media firms should assess their capital plans and consider timing purchases to maximize deductions, particularly as they invest in high-quality content creation and distribution technologies.

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 more than three years, a 75% exclusion for shares held more than four years, and a 100% exclusion for shares held more than 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 for inflation).

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

What it means for media companies

The tiered gain exclusions—starting at three years—could make media startups more attractive to investors seeking earlier tax-advantaged exits. This is especially relevant for companies developing innovative content platforms, creator tools, or monetization engines. Investors may be more willing to back ventures with shorter development cycles, knowing they can realize meaningful tax savings on earlier exits.

The increased per-issuer cap and higher asset threshold expand eligibility for media firms that previously exceeded the limits due to content libraries or production assets. Founders and executives should assess whether their corporate structure and growth plans align with QSBS eligibility, as it could enhance valuation and improve deal terms in future funding rounds or acquisitions.

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
  • Slightly increasing the corresponding effective tax rates (ETRs) and changing the foreign tax credit limitation
  • 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.

What it means for media companies

These reforms could influence where media companies choose to build, host, and monetize digital content. Businesses with global audiences, licensing deals, or distributed platforms will need to reassess how the new FDDEI and NCTI rules affect their tax exposure.

The updated rules may make it more appealing to keep intellectual property and platform development in the U.S. That could simplify operations by reducing the need to manage complex international tax structures and make it easier to claim deductions and credits. For media companies, this could mean fewer tax hurdles and potentially lower costs when developing and monetizing content.

Changes to foreign tax credit rules and slightly higher tax rates on foreign income mean companies should take a fresh look at how they structure international operations. For those earning significant revenue from licensing or advertising abroad, shifting IP or regional hubs back to the U.S. could lead to better after-tax results.

Qualified sound recordings

The OBBBA introduces an election to immediately deduct up to $150,000 for the costs of producing and recording a qualified sound recording in the United States in the year those costs are incurred. This is a new, explicit benefit for the music and sound recording industry, separate from the expensing rules for film, TV and live theater.

What it means for media companies

Media companies may accelerate tax deductions and improve cash flow in the year they incur qualified production and recording expenses. This is especially valuable for independent labels, music publishers and production studios investing in new albums, singles, podcasts or other audio projects.

Unlike the broader bonus depreciation rules, which apply to tangible assets like equipment and studio infrastructure, this provision specifically targets the creative and production costs of sound recordings. Media companies should review their project budgets and accounting practices to ensure eligible expenses—such as studio time, engineering, mixing and mastering—are properly tracked and documented.

Adapting to OBBBA changes: Next steps for media companies

OBBBA tax provisions represent significant opportunities for media companies, but they come with eligibility rules and planning considerations. Media 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, whether you are expanding content libraries, investing in streaming platforms, scaling production capabilities or pursuing other initiatives.
  • Review your capital investment, R&D and financing plans to align with the new incentives. This includes evaluating spending on studio infrastructure, post-production technologies, and proprietary content delivery systems.
  • 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—such as content catalogs, licensing rights, or digital platform assets.
  • 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 capital, R&D, and international tax positions—ultimately supporting more agile and informed decision making for media executives.

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