The passage of the One Big Beautiful Bill introduces a new set of tax and economic conditions that will directly influence how businesses are valued. For business owners, CFOs, and advisors preparing for a sale, succession plan, gift, or transaction, it’s essential to understand how these changes affect cash flow projections, risk assessments, and overall valuation strategies.

Lower Corporate Taxes Are Now Permanent—And That Lifts Value

One of the most important valuation takeaways from the new law is the permanent extension of the 21% corporate tax rate. In addition, businesses can once again take advantage of 100% bonus depreciation, allowing for immediate expensing of qualified capital investments.

From a valuation perspective, this changes the game:

• After-tax cash flow increases, which raises enterprise value in most income-based valuation models.
• Terminal values and discount rates may need to be adjusted to reflect this long-term tax certainty.
• Valuation multiples in comparable company analyses may also shift upward as the market reacts to the new baseline.

If your current valuation or financial plan is based on pre-2025 assumptions, now is the time to revisit the numbers.

Changes to R&D Expensing

Starting with tax years that begin after December 31, 2024, every dollar spent on qualified research performed inside the United States can be deducted in the same year the costs are incurred. Alternatively, elections can be made to capitalize and amortize domestic research expenditures over (1) a period of not less than 60 months (beginning with the month in which the taxpayer first realizes benefits from those expenditures) or (2) a 10-year period. 

Modeling should be undertaken to understand how these section 174A alternatives, as well as other optional methods, affect the value of your company. 

Estate Tax Exemption

The estate tax exemption was increased to $15 million per person beginning in 2026.  This amount is indexed for inflation and will increase in future years. 

Important to note: unlike the TCJA provisions, the OBBBA’s estate tax thresholds do not include sunset provisions, offering greater predictability. Nonetheless, future legislative changes remain a possibility, underscoring the importance of sustained, proactive planning, including the gifting of business interests which require a valuation. 

Energy Sector: Clean Tech Faces Headwinds, Fossil Fuels See Tailwinds

The bill also introduces a shift in how energy-related businesses will be valued going forward.

Key changes:

• Phase-out of clean energy tax credits
• Faster permitting for fossil fuel projects

For companies operating in solar, wind, EV infrastructure, and battery storage, the removal of incentives may reduce the attractiveness of certain projects. This could mean lower IRRs, delayed returns, and ultimately lower valuations.

Conversely, businesses in traditional energy and infrastructure may benefit from more favorable permitting conditions and long-term investment appeal

What Business Owners Should Do Now

Every business is unique, but the new law has introduced some universal action items:

• Review and update your valuation if you are pursuing a transaction, succession plan, gifting strategy, or financial reporting engagement.
• Revisit your long-term financial projections, especially tax assumptions and CAPX planning.
• Discuss industry-specific impacts with your valuation team—whether it’s changes to tax credits, funding sources, or regulatory outlook.

We are already working with clients across industries to update their valuation models in light of these shifts, and we encourage you to do the same.

The One Big Beautiful Bill is more than a tax update, it’s a signal that valuation inputs, assumptions, and industry risk factors are evolving quickly. Staying ahead of these changes can help you preserve and unlock value at critical points in your business lifecycle.

If you’d like to understand how this legislation impacts your business, please reach out. Our team is ready to walk through the details and make sure your valuation strategy is aligned with the new environment.

Wondering what other tax strategies are being reshaped by OBBBA?  Check out our Year End Tax Planning Guides for Businesses and Individuals.