Navigating OBBBA for the technology and life sciences industries

The recently enacted One Big Beautiful Bill Act (OBBBA) marks one of the most sweeping legislative shifts affecting corporate governance, financing structures, and compliance obligations for companies operating in high-growth, innovation-driven industries. While the bill’s broad scope impacts companies across every sector, technology and life sciences firms—particularly those that are venture-backed, closely held, or recently public—face unique and immediate implications.

Here is a high-level look at some of the key provisions of OBBBA that are reshaping the landscape for technology and life sciences; areas that present risk and opportunity for companies navigating the act. Whether you're preparing for a funding round, evaluating M&A strategy, or managing evolving disclosure requirements, understanding how this new law reshapes the playing field is critical.

Key Corporate Implications

1. R&D Expenditures: Immediate Deductibility Restored

Effective for tax years beginning after Dec. 31, 2024, R&D expensing has been reinstated, which could be especially impactful for life sciences and tech innovators.

• Fully deduct domestic R&D expenses in the year incurred
• Foreign R&D must still be capitalized over 15 years

Planning opportunities:

• Retroactive refunds via amended returns may be possible (for small businesses with ≤ $31 million in gross receipts and that are not a tax shelter). On Aug. 28 the IRS issued guidance in Rev. Proc. 2025-28 for taxpayers to make certain elections and accounting method changes provided under §70302 of the OBBBA. Before making the election, speak with your Baker Tilly advisor.
• Option to continue amortizing expenses from 2022–2024

2. Qualified Small Business Stock (QSBS): Expanded Benefits

Modifications to Section 1202, small business stock gain exclusion, which may affect the attractiveness of qualifying stock for founders and investors in emerging technology and life sciences companies.

What changed:

• Holding period: Now phased in (3 years = 50%, 4 years = 75%, 5 years or more = 100% exclusion)