Details of Public Law 119-21, section 70303 , One Big Beautiful Bill Act

The provision makes permanent the computation of adjusted taxable income without a deduction for depreciation, amortization, or depletion deduction when determining the amount allowed as a deduction for business interest, which was previously limited to taxable years before January 1, 2022, under the Tax Cuts and Jobs Act (Public Law 115-97, section 13301).

The provision also expands the definition of motor vehicle for floor plan financing interest used in determining the amount allowed as a deduction for business interest, to also include any trailer or camper which is designed to provide temporary living quarters for recreational, camping, or seasonal use and is designed to be towed by, or affixed to, a motor vehicle.

California conforms, under the PITL and the CTL, to the federal rules for the deduction of interest under IRC section 163, as of the specified date of January 1, 2025. Under the CTL, California specifically does not conform to the federal limitations on deductions of business interest. California does not conform to the changes made by this provision.

The estimated revenue impact to conform to the above federal provisions would result in the following loss:

26/27 27/28 28/29 29/30 ($85,000,000) ($50,000,000) ($47,000,000) ($46,000,000)