Article
Navigating tax and regulatory shifts: Key updates for public companies
Sept. 23, 2025 · Authored by Porter Loud, John Donohue, Dave Antoni
Public companies are facing a rapidly changing tax and regulatory landscape. The recently enacted One Big Beautiful Bill Act (OBBBA) budget reconciliation bill introduces tax changes that affect both individuals and corporations. At the same time, new leadership at the Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) is signaling a shift in regulatory priorities. Together, these developments are reshaping tax planning, financial reporting, and compliance strategies across industries.
Tax updates from the budget reconciliation bill
The OBBBA revises and extends several key provisions of the 2017 Tax Cuts and Jobs Act. Here’s a breakdown of what’s changing:
For individuals and payroll, effective 2025 – 2028
- Tips and overtime wages are exempt from federal income tax.
- Social Security benefits are no longer federally taxed.
- Interest on new U.S.-manufactured automobiles is now deductible.
Corporate tax changes
- Full expensing is back for equipment, machinery, and other qualifying domestic assets with recovery periods under 20 years.
- Domestic R&D costs are again eligible for immediate expensing; foreign R&D continues to be amortized over 15 years.
- Interest expense is now deductible up to 30% of EBITDA, restoring the pre-2022 standard.
Shift toward a cash flow tax base
These provisions shift the business tax system toward a cash flow model. Companies can deduct expenses more quickly, which lowers taxable income in the near term. For debt-financed investments, the combination of full expensing and interest deductions may produce unusually low or even negative effective tax rates on some assets. This change can increase deferred tax liabilities and add volatility to reported earnings.
International tax changes
- The Global Intangible Low-Taxed Income (GILTI)-related haircut on foreign tax credits drops from 20% to 10%.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.