The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, is rapidly reshaping the landscape for small businesses, workers, and the food and beverage industry across the United States. While the bill’s name might sound grandiose, its impact is already being felt in communities from Iowa to Texas, and in boardrooms and local diners alike. So, what’s actually inside this much-discussed legislation, and why are business owners and employees buzzing about its provisions?
According to The Food Institute Podcast, the OBBBA builds on the foundation of the 2017 Tax Cuts and Jobs Act, but introduces targeted updates designed to benefit companies that are growing, innovating, or investing in infrastructure. One of the most significant changes centers on the Research & Development (R&D) tax credit. Previously, food and beverage companies had to amortize qualified R&D expenses over five years—a process that often discouraged investment in new products or processes. Under the new law, these companies can immediately deduct qualified R&D expenses. That means activities like testing new flavors, improving shelf stability, or developing gluten-free alternatives now come with immediate, tangible tax savings.
"Many food and beverage companies have overlooked this credit in the past, but now, under the One Big Beautiful Bill Act, they can immediately deduct qualified R&D expenses instead of amortizing them over five years," explained Jeff Pera, managing director at CBIZ, on The Food Institute Podcast. This shift is expected to encourage more experimentation and innovation, especially among smaller manufacturers who previously found the old system too cumbersome to navigate.
Beyond R&D, the OBBBA also strengthens capital investment deductions. Businesses that invest in production-related infrastructure can now take advantage of 100% depreciation of qualified production property—provided that property is placed in service between January 19, 2025, and January 1, 2031, and is used exclusively for production. As Pera cautioned, "Even a small retail component in a production facility could disqualify a project from this full expensing benefit." This provision is a game-changer for restaurants, manufacturers, and others looking to modernize their operations without waiting years to recoup costs.
For employees, the bill introduces a suite of tax relief measures. Workers can exclude up to $25,000 annually in reported tips and up to $12,500 in overtime income (or $25,000 for joint filers) from federal taxes between 2025 and 2028. Employers, while not receiving a direct tax benefit, stand to gain from improved recruitment and retention—especially in high-turnover sectors like hospitality. Patrick O’Reilly, also of CBIZ, noted that these changes could make restaurants, cafes, and tasting rooms more attractive places to work, especially as competition for labor remains fierce.
Senator Chuck Grassley, who has spent August crisscrossing Iowa and meeting with constituents in 87 of the state’s 99 counties, reported a groundswell of enthusiasm from the restaurant and hospitality industries. In Council Bluffs, Grassley heard firsthand how the OBBBA’s provisions on tips and overtime are boosting employee morale and making it easier for businesses to attract and retain staff. "It’s good to hear how the One Big Beautiful Bill will boost businesses in our communities and I’m glad to hear from Iowans who are excited about keeping more of their hard-earned money," Grassley said. He further highlighted that eligible workers can claim a federal income tax deduction of up to $25,000 for tips retroactive to January 1, 2025, and up to $12,500 ($25,000 for married couples) for overtime wages. The law also provides a $6,000 tax deduction for eligible seniors, and a nonpartisan analysis projects that Iowans will save more than $3,000 on federal taxes on average next year.
It’s not just Iowa feeling the effects. In Texarkana, Texas, U.S. Senator John Cornyn met with local business owners at a manufacturer that’s been operating since 1986. Cornyn emphasized the permanence of key tax provisions, the expansion of deductions, and changes to reporting requirements as major wins for Texans. "The most important thing about this bill is to put the money that hard earned Texans are earning back in their pockets rather than have to pay more to the federal government," Cornyn stated during a roundtable discussion. The law’s no-tax-on-tips and overtime provisions, along with tax relief for seniors, are expected to benefit more than 3 million small businesses and 5 million workers in Texas alone.
The U.S. Chamber of Commerce has also weighed in, with Tom Sullivan, vice president of Small Business Policy, describing the OBBBA as a source of both immediate cash relief and long-term predictability for small businesses. One of the headline provisions is the permanent 20% qualified business income (QBI) deduction, which applies to sole proprietors, LLCs, and S-Corps. The state and local tax deduction cap has been raised as well, ensuring that federal tax savings aren’t simply wiped away by higher state taxes.
Investment incentives abound. The Section 179 expensing cap has doubled from $1.25 million to $2.5 million, allowing businesses to write off larger purchases of equipment, computers, and office furniture. For amounts exceeding that cap, 100% bonus depreciation is available, encouraging significant investments now rather than delaying them. Sullivan cautioned, "Delays until the start of next year can complicate filing and require amendments to past returns." He urged business owners to act promptly to maximize the bill’s benefits.
For small business owners, these changes mean more than just numbers on a balance sheet. The ability to immediately expense R&D costs, invest in infrastructure, and retain more cash for growth could be the difference between thriving and merely surviving. As Sullivan put it, "Congress realized that in order for the United States to remain competitive, they really need to have the wind at the back of small business owners that want to grow and create that competitive environment so that the United States stays ahead."
Meanwhile, the OBBBA addresses longstanding concerns around reporting requirements. The threshold for issuing 1099 forms is raised to $2,000 starting in 2026—a move designed to reduce the administrative burden on small businesses and address discrepancies caused by tips and taxes included in credit card payments. For many operators who rely heavily on card transactions, this could mean less IRS scrutiny and a smoother tax season.
Of course, the bill isn’t without its critics or complexities. Some business owners worry about the strict requirements for capital investment deductions, and tax professionals caution that navigating the new law will require careful planning. Still, the consensus among industry leaders, policymakers, and workers is that the One Big Beautiful Bill Act represents a significant step forward—one that rewards innovation, supports employees, and gives small businesses the tools they need to plan for the future.
As the provisions of the OBBBA roll out, experts recommend that business owners review their tax strategies and consult with knowledgeable advisors to ensure they’re making the most of the new opportunities. With the right planning, the law’s benefits could ripple through communities large and small, helping to drive growth, create jobs, and strengthen the backbone of the American economy.
In the months ahead, as small businesses and workers alike adjust to the new rules, the true impact of the One Big Beautiful Bill Act will become clearer. For now, one thing is certain: the conversation about taxes, growth, and opportunity in America has entered a new—and, for many, more hopeful—chapter.
