Welcome to this week’s edition of Tax Bytes. Our team of tax lawyers is actively monitoring for federal and international tax developments and issues of note. Each week we pull together the items we deem most important to provide updates you need to know for your business.
Tax developments
House passes the One Big Beautiful Bill Act with minor revisions to the international tax provisions
Minor changes were made to three international provisions in the “One Big Beautiful Bill” as passed by the House:
- Adjusted the section 250 deduction rate for foreign-derived intangible income to 36.5 percent and for global intangible low-taxed income to 49.2 percent;
- Increased the base erosion anti-abuse tax rate to 10.1 percent; and
- Limited the expanded civil penalty under the Tariff Act of 1930 to violations of US customs law only.
Read our full alert here.
Tax plan rolls back energy credits
The One Big Beautiful Bill Act would terminate or otherwise make significant changes to several of the energy tax credits created or expanded by the Inflation Reduction Act of 2022, generally with very short transition periods and would impose significant additional barriers to qualifying for and utilizing credits with respect to projects involving certain foreign entities of concern.
Read our full alert here.
The One Big Beautiful Bill – sports industry sweats the over/under
As the “One Big Beautiful Bill” continues its legislative path through Congress, it remains too close to call on how the final legislation will impact the sports industry.
The Bill implements the Trump Administration’s campaign pledge to extend the TCJA Tax Cuts. This component of the Bill represents the overwhelming portion of the agreed $5.3 trillion budget spend. As noted in our previous legal alert, the Bill also includes a number of pro-business provisions that will be favorable to industries as a whole, including the sports industry.
The Bill also includes a number of business-unfavorable provisions that are included in part to raise revenue to offset the tax cuts in other parts of the Bill. A number of these provisions will impact the sports industry directly or indirectly. Whether these provisions survive the legislative process will not be known until the final whistle.
Read our full alert here.
The One Big Beautiful Bill’s impact on investments in BDCs
Among other tax provisions, the “One Big Beautiful Bill” includes two provisions that, if enacted, would affect the tax consequences of individuals investing in business development companies (BDCs) that are treated as regulated investment companies for US federal income tax purposes.
Read our full alert here.
House Rules Committee’s revisions to One Big Beautiful Bill include amendment to partnership disguised sale rules
On May 21, 2025, the House Rules Committee released the manager’s amendment, which included various revisions to the previously released draft. These revisions include a proposed amendment to the partnership disguised sale rules under section 707(a)(2) by changing the introductory phrase from “Under regulations prescribed [by the Secretary]” to “Except as provided [by the Secretary].”
Read our full alert here.
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