The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, brings a mix of wins and setbacks related to the limitation on business interest deductions first enacted under the Tax Cuts and Jobs Act (TCJA) of 2017. On the favorable side, the new law adds back depreciation, depletion, or amortization to the calculation of adjusted taxable income (ATI) and expands floor plan financing to certain trailers and campers. On the unfavorable side, the new law excludes controlled foreign corporation (CFC) inclusions from ATI and requires the calculation of the interest limitation before the capitalization of certain interest. With retroactive and forward-looking effective dates, taxpayers can benefit from the favorable changes immediately and may plan to mitigate the unfavorable changes.

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