Tax Alert: Senate Releases Tax Bill Draft

NOTE: the summary below updates and replaces a prior article we released on May 22, 2025. This updated version contains changes incorporated by the Senate Finance Committee after the bill’s passage in the House on May 22, 2025.

On the afternoon of June 16, 2025, Republican Senate Finance Committee Chairman Mike Crapo of Idaho released the Senate’s draft version of a reconciliation tax package. The draft legislation is intended to serve as a substitute for the tax portion of President Trump’s One, Big, Beautiful Bill (H.R. 1) that passed the House on May 22, 2025, by a vote of 215 to 214.

In many respects, the Senate’s draft measure seamlessly adopts the House-passed version of the bill. However, for other important and contentious items, the Senate’s draft measure includes significant changes. These include more permanent business tax provisions, broader proposals to U.S. international tax rules, deeper cuts to Medicaid, slower phaseouts for clean-energy tax credits, and a much lower cap on the state and local tax deduction (“SALT cap”).

Also, certain rumored items, such as the corporate tax rate, a domestic manufacturing tax rate, the capital gains tax rate, and carried interest reform, remain omitted from the Senate’s draft measure.

Now, a lot of work must be done behind the scenes between Republican and Democratic staff before a vote, but the full Senate now appears on track to consider this new iteration of President Trump’s One, Big, Beautiful Bill by the week of June 23. Republican leadership has continued their fast-track approach for advancing this bill, but keep in mind that the differences in the House and Senate proposals below must be reconciled (i.e., the House and Senate approve the same version) before the bill can reach the President’s desk. Considering that, and the narrow margins for voting in Congress, we may not be as close to the finish line as it appears.

As we anticipate any changes from this bill moving through the Senate and between chambers, please consider the following deeper dive into many of key proposals from both the House and Senate thus far, summarized by tax type.

Please note that this alert omits a significant amount of tax provisions featured in both the House-passed bill and the Senate’s draft bill. Also note that the information provided herein is current as of June 17, 2025. The scope and timing of additional proposals, or revisions to existing proposals, remains uncertain. We will continue to closely monitor tax bill-related developments and provide updates as new details emerge. If you have any questions about how forthcoming tax legislation may impact you or your business, please consult with your Elliott Davis tax adviser.

The information provided in this communication is of a general nature and should not be considered professional advice. You should not act upon the information provided without obtaining specific professional advice. The information above is subject to change.