By: JEREMY OSTERBERGER President and COO BIC Alliance

There’s been a lot of political noise coming out of Washington lately, but one piece of legislation has managed to break through the static and deliver real, practical changes for American business owners — especially those along the Gulf Coast.

The One Big Beautiful Bill Act, signed into law this summer, includes several significant tax updates that could impact how small and mid-sized companies plan, invest and grow.

Whether you’re operating a contracting business, industrial service company, fabrication shop or engineering firm, it’s worth taking a look at these updates before we head into year-end planning.

To start, one of the most impactful changes is the permanent extension of the deduction of up to 20 percent of qualified business income (QBI) for pass-through entities, including sole proprietorships, partnerships and S-Corps. Previously enacted under the 2017 Tax Cuts and Jobs Act and set to expire in 2025, the QBI deduction now has no expiration date. That’s big news for small business owners, who now have more long-term certainty when it comes to their tax planning. As always, there are income thresholds and limitations based on industry, so working closely with a CPA is key to maximizing this benefit.

In addition to income tax relief, the bill also restores 100% bonus depreciation for qualifying capital investments made on or after January 19, 2025. That means businesses can fully expense certain equipment, machinery and even some facilities upgrades in the year they’re purchased and placed in service. This is a timely win for the Gulf Coast industrial base. We’re seeing increased demand for shop expansions, fleet upgrades and automation tools. Whether it’s a new crane system, a welding rig or a digital field services platform, the ability to expense those costs in full upfront is a powerful incentive to invest now rather than delay. Keep in mind there are some limitations based on asset type and business size, and the provision doesn’t apply retroactively. But with capex season around the corner, it’s smart to align your investment strategy with this updated rule.

The timing couldn’t be better. Increased certainty around capital expensing also comes as industrial spending ramps up across the country. According to the National Association of Manufacturers, nearly 60% of manufacturers plan to increase capital investments in the next 12 months, citing tax certainty and accelerated depreciation as key motivators. That bodes well for industrial service companies and fabricators along the Gulf Coast, where we’re seeing a wave of new projects in LNG, chemicals and refining. From large-scale plant upgrades in Louisiana to midstream expansions in Corpus Christi, this deduction helps companies justify investments that strengthen long-term competitiveness.

Another important provision in the bill addresses a source of confusion for many small operators: the 1099-K reporting threshold for third-party payment apps. The law rolls back a change that would have required reporting transactions over just $600 — a rule that would’ve affected users of platforms like Venmo, Cash App and PayPal. Instead, the original $20,000 and 200 transaction thresholds are restored beginning in tax year 2025. It’s a win for contractors and side businesses that use these apps, but it’s still smart to keep clean records as these platforms remain under IRS scrutiny.

This rollback also comes as the IRS sharpens its focus on small-business compliance. In a June update, the agency confirmed it is hiring more enforcement staff and deploying AI-driven tools to identify underreporting tied to third-party payment platforms. Even with the higher threshold restored, business owners should review their bookkeeping practices now to avoid issues later.

While these provisions may not affect every business owner directly, they do represent a more favorable policy environment for private companies. And stability is something the industrial sector could use right now.

As always, I encourage you to consult with your tax professional to determine how these updates may apply to your specific business structure or future investment plans.

For more information, call Jeremy Osterberger at (281) 538-9996.