On July 4, President Trump signed the Senate-amended One Big Beautiful Bill Act (OBBB) into law following its passage in the Senate and House by the narrowest of margins. The legislation includes a range of tax and fiscal provisions, several of which are of direct interest to SIFMA members and the capital markets at large.

The OBBB’s extension of expiring individual and business tax provisions avoids dramatic tax increases that could have negatively impacted economic growth. Importantly, SIFMA appreciates that lawmakers chose to reject certain proposals, including those that may have discouraged foreign direct investment in U.S. capital markets and financial assets—outcomes that would have posed broader economic risks. Further, the Administration and Congress wisely avoided upending the U.S. Treasury market and its systemic role in the financial system by addressing the debt limit. SIFMA commends policymakers for taking this necessary action.

Here is a high-level overview of several key outcomes of interest to SIFMA members:

Section 899

The final version of the bill did not include the newly created Section 899 that had been part of the House-passed package. This section would have  increased U.S. tax rates on certain income earned by foreign investors in jurisdictions deemed to impose “unfair foreign taxes” on U.S. persons or entities, including both discriminatory and extraterritorial taxes. Withholding rates could have reached as high as 50%, and created significant compliance and economic challenges for global investors and financial intermediaries.

Remittances

The original House version included a 3.5% excise tax on all transfers from U.S.-based to foreign accounts. The final bill reduced the rate to 1% and excludes transfers from accounts held with entities subject to the Bank Secrecy Act thereby addressing the unintended impact on non-domiciled investors in U.S. markets.

Executive Compensation (IRC 162(m))

The legislation did not expand the definition of “covered employees” under Section 162(m), leaving current deductibility limitations unchanged.

Municipal Bond Tax Exemption

The bill preserves the federal tax exemption for interest paid on municipal bonds.

Stock Buyback Excise Tax

The excise tax on stock buybacks remains at 1%, with no increase included in the final legislation.

IRA Tax Credits

Provisions that would have sunset clean energy tax credits under the Inflation Reduction Act were revised to include grandfathering for existing projects such as wind and solar. A proposed new excise tax on those projects was not included in the final bill. This transition relief is important for investors who have committed capital under existing law.

GILTI (Global Intangible Low-Taxed Income)

The final bill modifies interest expense allocation rules so that expenses are no longer attributed to the GILTI basket, representing a structural change to how U.S. multinationals calculate tax on foreign earnings.  This has the effect of reducing the overall U.S. tax burden on foreign income and improving the competitiveness of U.S.-based global firms.

Trump Accounts

The scope of eligible investments for the newly created “Trump accounts” was expanded to permit investment in products that are not composed solely of U.S. companies.

Pass-Through Entity Tax (PTET)

The House-passed language creating a federal PTET was not included in the final bill, preserving the existing treatment of state and local tax deductions for certain pass-through businesses.

Housing-Related Tax Credits

The bill supports the development of affordable housing—most notably through enhancements to the Low-Income Housing Tax Credit (LIHTC) program including a permanent 12% in the LIHTC allocation and lowering the bond financing threshold from 50% to 25%. It also includes provisions aimed at encouraging investment by making permanent the Opportunity Zone programs and New Markets Tax Credit, with the goal of boosting housing construction and economic revitalization in targeted areas.

Debt Limit

The legislation also included an extension of the statutory debt ceiling, which was projected to be reached in August absent congressional action.

With the legislative phase now complete, focus will shift to implementation. Several provisions will require clarification or additional guidance during the regulatory process. SIFMA’s tax team and related member committees will remain actively engaged with Treasury and other federal agencies to address remaining issues and advocate for practical implementation approaches that reflect the needs of the capital markets.

SIFMA will hold a Member Briefing on Tuesday, July 29 at 11:00 a.m. ET to discuss these provisions in detail and answer your questions. Check our Member Directory and register today.

Authors

Josh Wilsusen is Executive Vice President, Advocacy at SIFMA.

Jessica Barker is Vice President, Tax at SIFMA

Related Resources

• Member Briefing

  SIFMA Member Briefing: Inside the One Big Beautiful Bill

• Press Release

  SIFMA Statement on Congressional Passage of OBBB