What You Need to Know
The One Big Beautiful Bill Act
by Trent Cotney, Partner, Adams & Reese, LLP
(Editor’s Note: Trent Cotney, partner at Adams & Reese, LLP, is dedicated to representing the roofing and construction industries. Cotney is General Counsel for the Western States Roofing Contractors Association and several other industry associations. For more information, contact him at (866) 303-5868 or go to www.adamsandreese.com.)
The One Big Beautiful Bill Act (OBBB) signed into law on July 4, 2025, is the broadest rewrite of federal tax, trade, and spending policy since the 1980s. For architects, engineers, and contractors across the West the statute is not just abstract politics; it will shape cash flow, bid assumptions, and regulatory exposure before the year ends. Because many provisions apply to assets placed in service and wages paid after January 19, 2025, firms that wait for agency guidance may forfeit valuable opportunities. What follows is a concise overview of the provisions most likely to move project schedules and profit margins during the next 18 months, along with suggestions for immediate action.
OBBB restores 100 percent bonus depreciation for equipment and certain real property improvements, and it does so permanently. Excavators, tower cranes, robotic welders, and even high efficiency HVAC retrofits can now be expensed in year one. At the same time the Act makes the qualified business income deduction permanent and lifts it from 20% to 23% starting in 2026. Finally, it revives immediate expensing of domestic research costs. Together, these changes widen after tax cash flow and improve internal rates of return, making capital intensive innovations, such as on site 3D printing or off site modular fabrication, easier to finance.
Planning departments in Arizona, Nevada, and Oregon already report jumps in manufacturing, defense, and data center filings. Owners are moving quickly because facilities that break ground by 2028 keep the full bonus deduction if operational by 2031. OBBB also authorizes a wide portfolio of border security stations, air traffic control towers, advanced nuclear test beds, and semiconductor research hubs. Final appropriations will determine the regional split, but Western states are angling for a large share tightening labor markets and lengthening material lead times in the process.
The Act places a 10% surtax on imports from non World Trade Organization member countries and gives the President authority to negotiate additional country specific tariffs through 2025. Curtain wall systems, engineered lumber, and advanced batteries sourced abroad could spike in cost with limited notice. Meanwhile, stricter domestic content rules in every major federal funding stream will reward suppliers with United States plants but may intensify competition for limited production slots. Bid contingencies should therefore include escalation indices and contract language that shares tariff risk when adjustments exceed a stated threshold.
OBBB pivots incentives from wind centric to all of the above. Wind and solar Production Tax Credit/Investment Tax Credit begin phasing out for projects that start construction after June 30, 2028, while allowances for nuclear, geothermal, hydropower, hydrogen, and carbon capture expand. Net zero campus concepts that once hinged on photovoltaic subsidies may need redesign, but adaptive reuse and infill projects inside the West’s opportunity zones gain fresh impetus from accelerated structure expensing and a richer rehabilitation basis boost.
From 2025 through 2028 employers may claim an above the line deduction for overtime premium wages, capped at $12,500 per employee per year. A parallel deduction lets employees exclude tips up to $25,000. To capture either break, contractors must track exempt earnings at the employee level, upgrade payroll systems, and keep eligibility certificates on file. Expanded credits for employer sponsored childcare and paid family leave will likewise help retain journeymen in a tight labor pool.
Congress boosted Wage and Hour Division funding and told the agency to prioritize overtime and tip compliance but set no numeric audit quota. Contractors that use per diem stipends, production bonuses, or piece rate pay should revisit policies now to avoid back wage findings that can trigger debarment from federally assisted projects.
What to do Next:
1. Map every active or proposed project against OBBB’s effective dates, accelerate purchases, and ground breaks where bonus depreciation or energy credits are at stake.
2. Insert tariff sharing language and escalation indices into fixed price bid forms.
3. Capture the overtime and tip deductions by adding new pay codes and employee certifications to your payroll system.
4. Create a checklist for prevailing wage and apprenticeship documentation on any project seeking the high rate clean energy credits.
5. Convene a cross-functional task force to update standard contracts and internal controls within the next 60 days.
OBBB’s blend of tax perks, tariff exposure, energy pivots, and labor incentives rewrites the economic playbook for building in the West. Early movers will leverage deeper depreciation, richer federal funding streams, and broader clean energy credits to win work; late adopters will pay higher material prices and scramble for skilled labor.
