When the One Big Beautiful Bill Act (OBBBA) became law in July 2025, the headlines focused on infrastructure spending and sweeping tax reforms. Yet for business owners, the most immediate effects stem from smaller but meaningful tax adjustments: the reinstatement of 100% bonus depreciation, the return of immediate expensing for research and experimentation (R&E) costs, higher Section 179 limits and the continued availability of certain pass-through tax options.
One area where these updates are especially relevant is within Opportunity Zones. Created under the 2017 Tax Cuts and Jobs Act, Opportunity Zones are designated low-income census tracts that encourage investors to reinvest capital gains into qualified local projects. The intent is to draw private capital into areas that can benefit from economic development while giving investors potential tax advantages. Over time, the program has expanded beyond real estate to include operating businesses looking to modernize, hire or expand within these communities.
Under the OBBBA, several key Opportunity Zone timelines were clarified and extended, reinforcing the long-term nature of these investments. Investors who keep their Qualified Opportunity Fund (QOF) holdings for at least five years can reduce their deferred capital gains by 10%, while those maintaining their investment for seven years receive an additional 5% reduction. The most significant milestone remains the 10-year mark—after a decade, investors can permanently exclude any post-investment appreciation from federal capital gains tax when they sell or exchange the asset.
I have a client who illustrates this well. He owns a manufacturing company in Minnesota that operates within an Opportunity Zone. When we first began working together in 2021, the company employed just a dozen people and relied on a small set of older machines. Today, it has 50 employees and supplies components across the Midwest. This year, he is installing nearly $18 million in new automated equipment and expanding the facility by 40,000 square feet.
“Under the old rules, I would have had to write off only 40% of that investment in the first year,” he explained. “Now I can take the full deduction. That savings lets me hire more workers, pay down debt and invest in better technology. It changes how we plan for growth.”
The return of 100% bonus depreciation is significant because it allows businesses to deduct the full cost of qualifying property in the year it’s placed in service, rather than spreading the deduction over several years. This accelerates cash flow and gives owners more flexibility in how they allocate capital. For companies operating inside Opportunity Zones, that cash flow can be especially meaningful, allowing for immediate reinvestment in staff, machinery and operations while also supporting longer-term community impact.
The OBBBA also restored the ability for companies to immediately expense domestic R&E costs, a provision that had been scaled back under previous rules. For businesses in technology, manufacturing and energy sectors, this can make a notable difference in planning budgets and cash flow. Previously, R&E expenditures had to be amortized over five years, which often delayed tangible financial benefit. Immediate expensing allows companies to better match the timing of investment with operational growth.
For example, consider a startup developing sustainable materials in a Minneapolis Opportunity Zone. If the company invests $3 million in domestic research during 2025, that full amount can now be deducted in the same year, freeing resources for hiring engineers, expanding lab space or accelerating product development. In practical terms, it reduces friction for businesses trying to scale while keeping research activities domestic.
Section 179 expensing has also been increased, with the deduction limit raised to $2.5 million for property placed in service after 2024. This can be particularly helpful for businesses making capital improvements that may not qualify for bonus depreciation or that operate in states where bonus depreciation is partially disallowed. In combination with other provisions, Section 179 provides flexibility in how companies structure investments and manage both federal and state tax exposure.
Pass-through business owners—those operating through S corporations, partnerships or LLCs—benefit as well. The OBBBA preserves the pass-through entity tax (PTET), which allows these entities to deduct state and local taxes at the business level, effectively bypassing the federal SALT deduction cap. The Qualified Business Income (QBI) deduction is also now permanent and increases to 23% starting in 2026. These measures give owners additional options for managing after-tax cash flow, which can be reinvested into growth or debt reduction.
Opportunity Zones remain a targeted economic development mechanism, not a universal incentive. Their benefits are tied to compliance rules, timing of investments and the specific characteristics of the zones themselves. Likewise, bonus depreciation and R&E expensing provide financial flexibility.
For my client in Minnesota, the decision to expand within the Opportunity Zone was informed by a combination of economic opportunity, long-term business planning and available tax tools. “Before, we were under pressure to make projects fit a short-term timeline,” he said. “Now, we can plan over a decade and make investments that actually support sustainable growth.”
The OBBBA has prompted me to think about what I call the “acceleration economy”—an environment where businesses are encouraged to deploy capital quickly rather than defer decisions. By accelerating deductions and allowing immediate expensing, the law shifts the calculus for owners, creating incentives to act sooner rather than later. In practice, this affects hiring, equipment purchases and even strategic choices about locations for expansion.
Still, this acceleration comes with complexity. The interplay between Opportunity Zone deferrals, bonus depreciation, Section 179 deductions and state tax conformity can be intricate. Business owners should weigh these provisions carefully and consider how immediate deductions interact with long-term deferral opportunities.
For my client, the combination of Opportunity Zone status, bonus depreciation and R&E expensing means the company can expand thoughtfully while keeping resources flexible. “The law gives us tools, but it’s really about how we choose to use them,” he told me. “It doesn’t change the challenges of running a business, but it allows us to move faster in areas that make sense.”
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Securities and Advisory Services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. ART Tracking #824145