On July 4, the federal tax landscape shifted with the enactment of H.R. 1 — the “One Big Beautiful Bill Act” — which includes sweeping tax changes aimed at stimulating growth and providing a more stable United States tax law. For Utah’s vibrant startup ecosystem, the implications are far-reaching.
Moments like these can be pivotal. When the ground shifts, there’s an opportunity to reframe strategies, drive clarity and unlock new potential — but only for those who move deliberately and with trusted insight.
What’s changed and why it matters
H.R. 1 introduces substantial modifications to the tax code, aiming to stimulate domestic economic growth and simplify tax compliance. Key provisions include:
- 100% bonus depreciation made permanent: Businesses can now permanently expense qualified capital investments up front, an important lever for startups scaling infrastructure or investing in technology-heavy operations.
- Alterations to business deductions: While the federal corporate tax rate remains at 21 percent, changes in deductions and credits may affect effective tax rates for businesses. Modifications to interest expense deductions and new special depreciation rules for qualified production property focused on U.S. manufacturing could impact investment strategies. The bill also restored current deductions for certain domestic research and development expenses.
Of note, the following were not included in the Act:
- Pass-through entity tax (PTET): Early House and Senate drafts proposed significant limits on the deductibility of state-level PTET, which allows individual owners of partnerships and S-corporations to work around the limit on itemized deductions for state and local taxes. However, these provisions were ultimately excluded in the final bill.
- Carried interest: Many fund managers receive performance-based special allocations of profits, generally known as carried interest. Despite repeated calls from the president to increase taxes on carried interest, no changes were enacted.
- The “revenge tax”: Proposals included a sizable withholding tax on foreign investors from specific jurisdictions, but this measure was also removed from the final legislation.
For Utah’s business leaders, this legislation provides an opportunity to give a fresh look at their tax strategy, capital planning and long-term business structure.
Local shifts, local impact
Utah has also enacted several changes that impact the business climate:
- A corporate and individual income tax cut from 4.65 percent to 4.55 percent, effective retroactively to January 1, 2024.
- Strengthened workforce initiatives, including increased funding for Talent Ready Utah to help businesses access job-ready talent faster.
- Expanded sales tax obligations, particularly for remote transactions and digital commerce.
Together, these changes create a shifting business landscape with potential implications for growth and competitiveness — but only if businesses are ready to engage.
What Utah businesses should be thinking about
To help businesses respond strategically, here are a few practical considerations:
Re-evaluate your tax posture: With permanent changes to depreciation, interest limitations and credits, businesses should revisit how they forecast and manage tax exposure. What worked last year might not serve you next year.
Think workforce-forward: Talent remains a top concern. Businesses that align hiring and upskilling efforts with state-supported programs may unlock both performance and incentives.
Map out multi-state exposure: Not all states follow federal tax laws, so the impact of provisions like bonus depreciation and deductibility of research and development costs may vary by jurisdiction. Additionally, with updated sales tax standards in Utah and beyond, companies operating across state lines should build compliance infrastructure that can scale with growth and complexity.
Connect tax to growth: Whether you’re expanding facilities, investing in tech or launching a new service line, these tax changes may shift the economics. Make tax an input, not an afterthought.
Lean on trusted guidance: Complexity is increasing, and so are the tools and teams that can help. Engaging early with advisors helps you move beyond reacting to strategically preparing.