Dealerships One Big Beautiful Bill update

As part of our ongoing coverage, this big beautiful bill update breaks down how the One Big Beautiful Bill Act (OBBBA) in July 2025 marked a significant turning point for U.S. tax policy, particularly for dealerships and other closely businesses. Designed as a taxpayer and business-friendly measure, OBBBA extended several provisions from the Tax Cuts and Jobs Act (TCJA) while introducing new rules that reshape planning strategies for businesses, individuals and estates. For dealerships, the implications are particularly notable in areas such as interest expense deductions, bonus depreciation and qualified business income.

In this month’s episode of Up to Speed, Mike Mader, Principal with Baker Tilly’s dealership advisory service team, is joined by Dan Gillen, Tax Principal in Baker Tilly’s Washington D.C. office, to break down the tax law changes introduced under the One Big Beautiful Bill Act (OBBBA) and their impact on dealerships. They explore how dealers can leverage new provisions for tax planning in 2025 and beyond.

Business tax provisions

Business interest expense

One of the most impactful changes for dealerships involves Section 163(j), the limitation on business interest expense. Under TCJA, deductions were capped at 30% of adjusted taxable income (ATI). Initially, ATI was calculated as EBITDA (earnings before interest, taxes, depreciation and amortization), but later revisions excluded depreciation and amortization, shifting the measure to EBIT.