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.

New Tax Reforms Signed, Enhancing Construction Industry and Critical Minerals Production

On July 4, 2025, President Donald Trump signed a significant new tax law known as the Comprehensive Budget and Tax Act, marking a major advancement for the construction industry. This legislation has been welcomed by key industry associations as a vital step in creating a more stable and predictable business environment for construction businesses and suppliers.

Leading organizations such as the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA) and the Associated Builders and Contractors (ABC) are expressing strong support for the new provisions. The law reinstates essential tax incentives that industry professionals heavily rely on, including bonus depreciation and Section 179 expensing. These changes are expected to significantly improve financial planning for contractors, allowing them to make informed investment decisions for growth.

Additionally, the tax credits associated with the CHIPS Act have been enhanced, alongside new incentives aimed at boosting research and development (R&D). The restoration of immediate expensing for R&D costs is particularly crucial as it provides direct financial relief for contractors navigating the complex market environment.

Despite the optimistic outlook, industry leaders stress that advocacy efforts must continue, especially concerning incentives aimed at promoting energy-efficient building. The new tax law is primarily viewed as a long-overdue solution to the challenges faced by construction companies, offering them certainty that is vital for planning and growth.

Moreover, both SMACNA and ABC have highlighted significant tax exemptions related to overtime pay. These provisions allow construction firms to allocate resources more effectively, further supporting their operational objectives. However, concerns remain, as various contractor-friendly residential tax credits are set to expire between 2025 and 2026. Industry advocates are urging lawmakers to maintain momentum on regulatory reforms to enhance contractor competitiveness in the evolving market.

Construction firms are encouraged to analyze upcoming projects carefully to maximize the benefits provided by the new provisions under the Comprehensive Budget and Tax Act. The act is a critical component in supporting the viability and sustainability of the construction industry, and associated organizations emphasize the need for ongoing advocacy to secure additional incentives in future legislative sessions.

The legislation also introduces changes through the One Big Beautiful Bill (OBBB), which includes crucial modifications to the Internal Revenue Code’s Section 45X. This section establishes a tax credit for manufacturers engaged in producing components for clean energy technologies. A significant addition is the inclusion of metallurgical coal on the list of applicable critical minerals, allowing it to qualify for tax credits under Section 45X.

Companies engaged in the production of metallurgical coal from 2026 to 2029 can expect to benefit from a tax credit equivalent to 2.5% of their production costs, further stimulating investment in this sector. Meanwhile, tax credits for other applicable critical minerals will begin with a 10% credit, decreasing gradually to zero by 2033, which reflects an overarching initiative to enhance American mineral production.

As organizations combine their voices in support of these crucial reforms, it is evident that the new tax laws seek to facilitate growth in the construction and critical minerals sectors. The future of these industries may depend on how effectively they leverage these newly implemented tax provisions and how vigorously they advocate for additional incentives moving forward.

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Additional Resources

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