The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, represents one of the most significant overhauls of the U.S. tax code in recent history.

The legislation enacts a wide array of changes, making permanent many of the temporary provisions of the 2017 Tax Cuts and Jobs Act (TCJA), while introducing new deductions and altering the taxation of both individuals and corporations.

Here’s a detailed look at the key aspects of the bill and PCOB’s observations on how it may affect taxes for pest control companies and their owners.

Don’t miss a discussion about the One Big Beautiful Bill Act on Episode 234 of the PMP Industry Insiders Podcast.

For Individuals & Families

Permanent extension of TCJA provisions

The OBBBA makes permanent the individual tax rate cuts first introduced in 2017, preventing a scheduled increase in income taxes for most Americans. It also maintains the existing seven tax brackets. The higher standard deduction, which was set to expire, is now permanent and has been increased.

Our take: Extending the TCJA tax cuts from 2017 is the most significant part of this legislation. While this is a big tax cut, most people won’t feel it one way or the other because they are used to the current taxes rates and available deductions. So most things don’t change.

Elimination of taxes on tips and overtime pay

A centerpiece of the bill is the new federal income tax deduction for income earned from tips and overtime pay.

• Tips: The deduction for tip income is capped at $25,000 annually. This benefit is subject to a phase-out for individuals with a modified adjusted gross income starting at $150,000.
• Overtime: The deduction for overtime pay is capped at $12,500 for single filers and $25,000 for married couples filing jointly. This provision also has income limitations.

Our take: Overtime for this purpose is defined as the “half” in “time and half.” Both tips and OT, while not taxable as income, are still subject to FICA taxes.

Changes to deductions and credits

• State and Local Tax (SALT) Deduction: The cap on the deduction for state and local taxes, a contentious issue since its implementation in 2017, has been raised from $10,000 to $40,000 for five years. However, this increased cap will phase out for higher-income earners.

Our take: The deduction is reduced by 30 cents for each dollar that modified adjusted gross income exceeds $500,000. This reduces the deduction back to $10,000 for taxpayers earning over $600,000.

• Child tax credit: The Child Tax Credit has been increased to $2,200 per child, up from the $2,000 established by the TCJA.
• Senior tax deduction: A new deduction of $6,000 per person has been introduced for individuals aged 65 and older.
• Charitable contributions: The bill introduces a floor for the itemized deduction for charitable contributions, set at 0.5 percent of adjusted gross income.
• Trump accounts: The legislation establishes new tax-advantaged savings accounts, seeded with a government contribution for newborns, which can grow tax-free.

Our take: This program will work similar to the Roth, which allows the income to grow tax free until distribution. Families can make after tax contributions of up to $5,000 per year. Distributions can be made starting when the beneficiary turns 18 for higher education, a first home purchase or to start a business.

For Businesses

Permanent corporate tax rate

The corporate income tax rate remains at 21 percent, a permanent fixture from the 2017 law.

Expensing and depreciation

• Full bonus depreciation: The law restores 100 percent bonus depreciation, allowing businesses to immediately write off the full cost of new equipment and machinery. This is a significant incentive for capital investment.
• Research and development (R&D) expensing: The requirement to amortize R&D expenses over five years has been repealed, allowing for immediate expensing.

Pass-through businesses

The 20 percent deduction for qualified business income (QBI) for pass-through entities (like sole proprietorships, partnerships and S corporations) has been made permanent.

Other notable tax provisions

• Estate and gift tax exemption: The higher exemption amount for the estate and gift tax has been made permanent and increased to $15 million per individual.
• Repeal of green energy credits: Many of the clean energy tax credits established by the Inflation Reduction Act have been rolled back or eliminated.
• Preservation of the pass-through entity tax (PTET) workaround: In a crucial development for businesses in states like Florida, the final version of the OBBBA preserves the ability for pass-through entities to deduct state income taxes at the entity level. This PTET workaround allows PTE owners to effectively bypass the individual SALT deduction cap.

Our take: The tax provisions within the One Big Beautiful Bill Act are extensive and are projected to have a significant impact on the U.S. economy, affecting individuals, families and businesses across all income levels and sectors. The long-term effects of these changes will be a subject of ongoing analysis and debate among economists and policymakers.

As always, PCB’s Client Managers and Tax Managers are on committed to staying on top of the ever-changing tax code to ensure we’re helping clients save on taxes to fuel growth and profitability.

Question about a taxes for your pest control or lawn care business? Get in touch.