New Tax Reforms Enhance Construction and Minerals Production

News Summary

President Trump has signed significant tax reforms aimed at advancing the construction industry and critical minerals production. Key provisions restore tax incentives essential for contractors, including bonus depreciation and Section 179 expensing. Support from industry associations underscores the importance of financial planning and investment growth. Enhanced tax credits for research and development, along with new measures for energy-efficient building, signal a crucial shift. These reforms address longstanding challenges and aim to fortify market conditions, making it vital for construction firms to adapt and advocate for future incentives.

Major Tax Reforms Signed into Law, Boosting Construction Industry and Critical Minerals Production

On July 4, 2025, President Donald Trump enacted significant tax reforms through the Comprehensive Budget and Tax Act, marking a pivotal moment for the construction industry and related sectors. This legislation is seen as a major victory, backed by key industry associations, including the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) and the Associated Builders and Contractors (ABC).

The new law reinstates crucial tax measures such as bonus depreciation and Section 179 expensing, common practices that allow contractors to deduct expenses for equipment and property more swiftly. The restoration of these tax incentives is significant for construction businesses, providing a more structured and predictable financial landscape, especially for HVAC construction and related suppliers.

In addition to established provisions, the law enhances the tax credits available under the CHIPS Act, focusing on research and development (R&D) incentives that foster innovation within the industry. This immediate access to expensing for R&D costs delivers a clear financial cushion for contractors engaged in progressive construction practices.

While the legislation brings favorable changes, advocates stress the importance of continued efforts to secure additional energy-efficient building incentives. Although the new provisions offer a framework for tax stability, the looming expiration of various contractor-friendly residential tax credits by 2025 or 2026 presents a potential setback for the industry. Stakeholders within SMACNA and ABC emphasize the need for ongoing advocacy to maintain competitiveness in the construction field.

Both organizations encourage their members to assess current projects and identify opportunities that align with the new benefits introduced under the Comprehensive Budget and Tax Act. This proactive approach can help maximize available advantages, promoting growth and investment in the construction sector.

In a related legislative effort, the One Big Beautiful Bill Act has made notable adjustments to the Internal Revenue Code’s Section 45X. This section now offers a tax credit for manufacturers producing eligible components specifically for clean energy technologies. A significant addition to this regulation is the inclusion of metallurgical coal, expanding the scope of eligible critical minerals and allowing companies engaged in its production between 2026 and 2029 to earn tax credits equal to 2.5% of their production costs.

The phasing down of tax credits for other applicable critical minerals is also an essential aspect of the new law, starting with an initial credit of 10% that gradually reduces to zero by 2033. This strategic move reflects a broader initiative aimed at bolstering American mineral production and supporting coal production in the ongoing push for energy independence and innovation.

As the construction industry grapples with a changing regulatory landscape, it is essential for firms to stay informed about the latest developments to leverage the advantages presented by these recent tax reforms. Organizations like SMACNA and ABC reaffirm their commitment to advocating for additional incentives and beneficial modifications in future legislative sessions.

In conclusion, the Comprehensive Budget and Tax Act signifies a critical development for the construction industry and the production of essential minerals, aligning with efforts to enhance investment, stimulate growth, and ultimately, secure a competitive edge within the marketplace.

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Additional Resources

• Hunton Nickel Report
• ACHR News
• Bloomberg
• New Indian Express
• Wikipedia: Tax Reform