Big Beautiful Bill: 6 Ways it Reshapes Texas Construction
The One Big Beautiful Bill Act (OBBA) rewires how contractors finance equipment, recruit labor, structure projects, and comply with federal standards. Here are six high-impact changes—framed for Houston and Texas builders and trade partners—to keep on your radar. Consult a tax advisor for impacts specific to your business.
Permanent 100% Bonus Depreciation Super-Charges CapEx
Contractors can now expense the full cost of eligible machinery, vehicles, and other qualified property placed in service on or after January 19, 2025. This cash-flow bump lowers the after-tax price of capital equipment by up to 30%, making it easier to:
Modernize fleets before material prices climb.
Pair purchases with cost-segregation studies to reclassify building components into 20-year-or-less buckets and capture immediate write-offs.
Section 179 Expensing Doubles for Small & Mid-Size Builders
The OBBA raises the Section 179 deduction (for purchases of depreciable business equipment) ceiling to $2.5 million and the phase-out threshold to $4 million starting in 2025. Coupled with bonus depreciation, this creates a one-two punch for firms that buy smaller ticket items—tools, software, light trucks—while still enjoying immediate expensing on heavy equipment.
Domestic-Content & “Made-in-America” Mandates Intensify Supply-Chain Stress
Energy-related projects claiming Section 48 or 45 credits now earn an extra 10-percentage-point bonus only if at least 40% of manufactured components—and 100% of structural steel and iron—are U.S.-produced (rising to 55% by 2026). Texas contractors bidding on utility-scale solar, battery storage, or federal facilities must:
Verify origin data from OEMs early, or risk retrofit penalties; and
Budget for price premiums on domestically milled steel already running 15-20% above imports.
Project Pipeline Swells—but So Do Labor Shortfalls
Federal reimbursement for Texas border-wall assets and a $150 billion boost to defense programs will push public-sector lettings in the Rio Grande Valley, El Paso and the Gulf Coast. Yet the industry must attract an estimated 439,000 additional craft and professional workers nationwide in 2025, with wages already rising 4.4% year-over-year. AGC’s latest outlook shows 74% to 81% of Texas firms struggling to fill hourly roles and expecting continued material volatility. Contractors should:
Revisit escalation clauses tied to labor indices; and
Leverage Chapter 1303 public-workforce grants and joint apprenticeship programs to secure talent pools before bid day.
Housing & Community Incentives Shift the Residential Mix
The bill permanently expands the Low-Income Housing Tax Credit and makes the New Markets Tax Credit permanent, while rescinding $2.4 billion from Neighborhood Access & Equity grants. Multifamily developers can stack LIHTC with local property-tax abatements shown to return $1.83–$39.82 in annual tax revenue per $1 of incentive, boosting affordability in metros like San Antonio and Dallas-Fort Worth. Meanwhile, builders targeting ENERGY STAR or §45L credits must track evolving domestic-content rules to hit bonus thresholds.
Accounting Relief: Completed-Contract Method Widens
OBBBA lets residential projects with more than four dwelling units elect the completed-contract method instead of percentage-of-completion for tax years beginning in 2026. Profit recognition defers until substantial completion, smoothing earnings volatility for multifamily and student-housing GCs.
Action Steps for 2025 Bid Season
Model tax scenarios: Combine bonus depreciation, Section 179 and 199A pass-through deductions before setting guaranteed-maximum prices.
Audit supply chains: Map domestic vs. imported components early; negotiate price-adjustment clauses tied to domestic-content thresholds.
Lock in labor: Use multi-year project labor agreements or merit-shop retention bonuses as workforce shortages deepen.
Monitor secondary rules: Treasury guidance for domestic content and apprenticeship ratios remains fluid—calendar alerts for IRS notices.
Texas builders who align contract terms with these six levers will convert the Big Beautiful Bill from a compliance burden into a competitive edge—cementing their footing while Washington pours a fresh foundation for the next construction cycle.
Ready to fortify your next project with ironclad legal protection? Contact Elkhoury Law today to schedule a strategic consultation and discover how I can safeguard your contracts, deadlines, and bottom line.
