In an overnight “vote-a-rama” session on July 1, the U.S. Senate officially passed President Trump’s sweeping tax-and-spending legislation, the “One Big Beautiful Bill” by a razor-thin margin.

The vote ended in a 50–50 tie, with Vice President J.D. Vance casting the decisive tie-breaking vote, resulting in a final tally of 51–50.

This pivotal vote enables the bill to proceed to the House of Representatives, which must now concur with the Senate’s amendments. It is important to note that the bill has not yet been enacted; final passage will only occur once the House approves the Senate version.

Only then can the legislation be sent to the President’s desk for signature and become law.

Spanning 887 pages, the bill lays out sweeping changes to tax policy, federal spending, and domestic programs.

President Trump reaffirmed his urgency for timely action in a Truth Social post on Tuesday: “We are on schedule — Let’s keep it going and be done before you and your family go on a July 4th vacation.”

Key changes introduced in the Senate-approved bill are summarized below.

Highlights

1. Remittance Tax Slashed to 1% from the earlier 3.5%: Major relief for NRIs
2. ‘Revenge Tax’ Provision Killed: Section 899 struck from the draft
3. BEAT Rate set to 10.5% instead of 14%; Other Senate Finance Committee Proposals including high tax exception for BEAT dropped

Remittance Tax Reduced to 1%

• The original version of the One Big Beautiful Bill Act (OBBBA), introduced in the House in early 2025, proposed a 5% flat excise tax on all outbound remittances sent by non-U.S. citizens and non-nationals.
• Due to concerns about undue burden on immigrant communities sending money abroad, it was later amended to 3.5%. However, the scope remained broad, meaning all transfer methods were still taxable.
• The Senate Finance Committee has now further lowered the rate to 1%.
• Major change: bank and card-based transfers are carved out,e., no tax applies if the remittance is:
  • Sent from a S. bank account, or
  • Made using a S.-issued debit or credit card.
• The revised provision applies to remittances made on or after January 1, 2026.
• While the current bill retains the SSN requirement for claiming the credit, it hasn’t been enacted yet. The law will only be final once both the Senate and House pass the same version.

INTERNATIONAL TAX PROVISIONS

Revenge Tax (Section 899): Cancelled, for Now

• Proposed under Section 899 of the OBBBA draft, this measure sought to impose retaliatory tax penalties on companies from discriminatory countries that levy “unfair taxes”.
• Often referred to as the “revenge tax,” it was intended to mirror or penalize foreign jurisdictions for taxing U.S. digital and tech companies abroad.
• The proposed Section 899 sought to impose a 5%–15% extra tax on entities with ties to such discriminatory countries, while also broadening the scope of the Base Erosion and Anti-Abuse Tax (BEAT) under IRC Section 59A.
• The provision faced strong pushback from G7 nations and the U.S. Treasury, which warned it could undermine OECD tax agreements and violate global trade norms.
• Now, OBBBA’s punitive “revenge tax” provision targeting countries imposing digital services or UTPR taxes has been officially removed.

BEAT

• The Senate’s draft bill proposes a modest increase in the Base Erosion and Anti-Abuse Tax (BEAT) rate from 10% to 10.5% (the Senate Finance Committee version would have increased it to 14%).
• All other BEAT-related modifications previously proposed by the Committee (including high tax exception) have been dropped from the current version.

Section 250 Deduction Scaled Back for GILTI and FDII

• Under the current law, IRC Section 250 provides a deduction of 37.5% for Foreign-Derived Intangible Income (FDII) and 50% for Global Intangible Low-Taxed Income (GILTI)
• These deductions were enacted as part of the 2017 Tax Cuts and Jobs Act (TCJA) and are scheduled to sunset after 2025, reducing the FDII deduction to 21.875% and GILTI deduction to 37.5% beginning January 1, 2026
• The House version of the One Big Beautiful Bill Act (OBBBA) aimed to make the current deduction rates permanent, setting the rates at 36.5% (FDII) and 2% (GILTI) deductions.
• In contrast, the Senate’s June 28, 2025, draft proposes lowering IRC Section 250 deduction to:
  • 34% deduction for FDII
  • 40% deduction for GILTI
• The Senate bill introduces updated nomenclature within the international tax regime by renaming Global Intangible Low-Taxed Income (GILTI) as “net CFC tested income” and Foreign-Derived Intangible Income (FDII) as “foreign-derived deduction eligible income.” This revision seeks to provide greater clarity and alignment between statutory terminology and the economic substance of the respective income categories under the revised Section 250 framework.

Deemed Paid Credit for GILTI Inclusions Increased to 90%

• Currently, domestic corporations are deemed to have paid 80% of foreign income taxes attributable to CFC tested income.
• The Senate Bill increases the deemed paid tax credit from 80% to 90%, increasing the amount of foreign taxes that can be credited for GILTI inclusions

OTHER BUSINESS PROVISIONS

Depreciation & Expensing

• Permanent 100% Bonus Depreciation: Extends full bonus depreciation for qualifying property acquired after January 19, 2025, including specified plants, making it a permanent provision rather than a temporary one.
• Section 179 Expensing Limit Raised: Increases the maximum immediate expensing under Section 179 to $2.5M, phasing out above $4M, with inflation adjustments.

Research & Development (R&D)

• Immediate Deduction for Domestic R&D: Enables full expensing of domestic R&D costs for tax years starting after December 31, 2024; foreign R&D still amortized over 15 years. Offers retroactive options back to 2022 for small businesses (with receipts of ≤ $31M) and a 1–2 year catch-up for others.

Business Interest

• Interest Deduction Limitation Reordering: Section 163(j) interest limitation applies before capitalization, ensuring business interest is calculated prior to asset capitalization.
• EBITDA Reinstated for Interest Limitation: Reinstates the EBITDA-based interest limitation (excluding depreciation/amortization) instead of the EBIT-based limitation.

Production & Investment Incentives

• Qualified Production Property Depreciation: Provides 100% first-year depreciation for qualifying non-residential manufacturing property placed in service post-January 19, 2025.
• Enhanced Advanced Manufacturing Credit: Raises the investment in semiconductor manufacturing and related equipment credit from 25% to 35% for property placed in service after December 31, 2025 (Senate Finance had proposed 30%).

Real Estate, Opportunity & New-Industry Provisions

• Qualified Small Business Stock (QSBS) Gains Exclusion Raised: Exclusion increases to 75% for stock held ≥ 4 years and 100% if held ≥ 5 years.
• Section 461(l) Excess Business Losses Made Permanent: Keeps the current cap, which is set to expire after 2028; Finance Committee removal proposal dropped.

Clean Energy Provision Rollbacks

• Large-Scale Phase Out of Renewables Credits: Eliminates federal wind and solar tax credits after 2027 (100% credit only for projects beginning before the end of 2025, phasing down by 2028); retains credits for hydro, nuclear, and geothermal.
• New Tax on Projects with Chinese Components: Imposes new tax on wind and solar projects using Chinese-made parts after Dec 31, 2027.

As the bill moves through final reconciliation, businesses, taxpayers, and advisors must stay vigilant. Several provisions remain uncertain, and their ultimate impact will depend on the language that is enacted.