This year, the Security Industry Association (SIA) successfully advocated for five tax and workforce development priorities to be included in the large reconciliation package that was signed into law on July 4, 2025. Security integrators will see benefits from these pro-growth business policies, including modifications to passthrough tax rates, bonus depreciation expensing for customers, immediate research and development (R&D) deductions, some modifications to their adjusted taxable income, and an increase in the available workforce encouraged by expanded uses of 529 plans.  

Tax Rates for Passthrough Entities 

The 2017 Tax Cuts and Jobs Act (TCJA) created a deduction that allows taxpayers to exclude up to 20 percent of their passthrough business income from federal income tax. Although the provision was set to expire on Dec. 31, 2025, the One Big Beautiful Bill Act (OBBBA) makes that deduction permanent, preserving the deduction for sole proprietorships, partnerships, and S corporations. Owners avoid double taxation and can claim a net operating loss deduction on their personal taxes. OBBBA also expands the phase-in thresholds (increasing eligibility for filers near the top of the window) and introduces a new minimum deduction of $400 for taxpayers with qualified business income.   

100 Percent Bonus Depreciation  

A temporary provision of the TCJA allowed 100 percent expensing for business property, which dropped by 20 percent each year starting in 2023 to be completely phased out by 2026. OBBBA makes the provision permanent and returns the rate to 100 percent, meaning that any qualifying property placed into service on or after Jan. 19, 2025 will be eligible for this increase in deductibility. Integrators will likely see an increase in demand from their customers, as many businesses have historically used such expensing provisions to reduce the overall cost of building improvements, including upgrades to security and life safety systems.  

Immediate R&D Deduction 

The law currently requires that businesses amortize research and development expenditures over five years (15 years for foreign R&D). OBBBA makes permanent immediate expensing for domestic R&D expenditures while maintaining the 15-year amortization for foreign R&D costs. Restoring this deduction allows integrators to once again fully deduct domestic R&D expenditures in the year they are incurred.  

Modifications to Adjusted Taxable Income (ATI) 

Since January 2022, interest deductions under section 163(j) have been limited to 30 percent of earnings before interest and tax. OBBBA permanently adds back depreciation and amortization to the calculation, restoring the EBITDA-based interest deduction, benefiting capital-intensive companies that can debt finance and grow their businesses. However, integrators should be aware that other provisions in the legislation make less favorable adjustments to the 163(j) calculation, requiring that the limitation be applied before elective interest capitalization and excluding international gross-ups from ATI calculations.   

Expansion of 529 Eligible Uses 

OBBA includes language from the Freedom to Invest in Tomorrow’s Workforce proposal, which allows tax-exempt distributions from 529 savings plans to be used for additional qualified higher education expenses associated with postsecondary credential programs. This will help more Americans obtain and retain well-paying jobs that don’t require a traditional four-year degree, a critical labor sector within the security industry. SIA advocated for this change for several years as part of the Professional Certification Coalition. 

For a full list of security industry priorities that were included in the reconciliation package, see SIA’s analysis of the bill.

Read more SIA Waypoints columns.