Distributors Applaud Passage As the vice president of government
relations for the National Association of Wholesaler-Distributors (NAW), Alex Hendrie has kept a finger on the pulse of OBBBA since conversations about the act started in early 2024. Since then, he’s been tracking its progress, weighing its implications and helping distributors understand what it means for their businesses. “We’ve been working on this for years and we couldn’t have hoped for a better outcome,” Hendrie said. “A number of individual and business tax provisions had either expired or were set to expire, and there was also the risk of harmful tax increases. We got permanency on all the key things and also avoided many of the tax offsets that were being floated.” In addition to extending and
preserving critical tax breaks, the OBBBA introduces several new incentives that could directly benefit the wholesale distribution sector. Among them are a tax deduction tied to U.S.- based factories and warehouses and no federal income tax on overtime pay. “Not only did we prevent a tax increase on a lot of businesses and workers,” Hendrie says, “but we also have these new opportunities for the industry.” So far, NAW members have
responded positively to the act’s passage. Many of them are structured as S corporations and may benefit from the now permanent 199A deduction. Others are enthused about the provisions related to bonus depreciation and research and development. “There’s a lot of happiness around the certainty that the OBBBA delivers,” Hendrie said. “We’re hearing a lot of excitement and fielding a lot of questions. It’s a big bill with a lot of moving parts, and members are trying to make sure they’re reading it right.”
While the tax priorities are now largely resolved, Hendrie said other
“The tax rate changes and the ability to expense capital purchases more quickly are positives. However, a lot of those gains are canceled out by tariffs and other external pressures. That’s the frustrating part.”
— John Haselbarth CFO
National Refrigeration and A/C Products, Inc. (NRAC)
business issues remain top of mind, including tariffs and workforce challenges. He also flagged additional OBBBA provisions related to paid leave, Pell Grants and healthcare that could impact employers. “It’s a massive bill,” he says, “and while taxes are a core focus, there’s still more in there that’s worth exploring.”
Exploring the Possibilities For Brian Reardon, president of the S
Corporation Association, the passage of the OBBBA wasn’t just a win. It was a massive relief. “If Congress had done nothing, there may have been a $4 trillion tax hike,” he pointed out. Pass- through businesses like S corporations and LLCs were facing the loss of key provisions from the 2017 Tax Cuts and Jobs Act, including lower rates, the Section 199A deduction and a higher estate tax exemption.
The OBBBA now allows those businesses to plan ahead without fearing a sudden spike in their tax bill. The act also helped restore parity between pass-throughs and C corporations at a time when the tax code would have pushed more family businesses into becoming C corporations. “Forcing family businesses into the C corp structure would have hurt their ability to compete,” Reardon said, noting that the OBBBA ensures that pass-throughs aren’t penalized
simply for choosing a more flexible, privately held corporate structure. Another important, though less publicized, victory for businesses in the reconciliation bill was the protection of state and local tax (SALT) parity, Reardon said. This refers to state and local taxes that are typically capped at $10,000 for individual filers under federal law. However, many states have adopted an entity-level tax election that allows pass-through businesses — such as S corporations and partnerships — to deduct those taxes at the business level instead of the individual level. For small and midsized business owners in high-tax states such as California and New York, keeping the entity-level SALT deduction in place
BRIAN KELLY PRESIDENT NATIONAL REFRIGERATION AND A/C PRODUCTS, INC. (NRAC)
Fall 2025 13
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