SALT, College Tax, Energy: Winners and Losers in New GOP Bill

After weeks of arm-twisting and hand-wringing, Senate Republicans’ new version of their tax-and-spending bill text sets up an hours-long “vote-a-rama” during which Democrats will offer a slew of amendments, ahead of a final vote.

The Senate is expected to start voting on the legislation Saturday. Once the Senate passes a bill, the House will have to vote on it to meet the GOP’s self-imposed deadline of getting a bill on the president’s desk by July 4.

Senate tax writers are still waiting for additional rulings from the chamber’s parliamentarian, and fine tuning their text. The tax section released early Saturday morning does have some changes, but isn’t the final version, according to a source familiar with the process.

Here are some early winners and losers.

Winners

House Republicans from blue states: The House version of the legislation would raise the SALT cap to $40,000 from $10,000, securing the votes of a handful of these Republicans from higher-tax states like New York and California. But an earlier Senate version of the bill kept the original $10,000 created in the 2017 GOP tax law—infuriating some of those House GOP lawmakers.

In the end, the new Senate text included the cap hike to $40,000, though the rate would snap back to $10,000 after five years.

The new Senate version also would do away with restrictions—which were a part of both the earlier Senate version and the House version—on workarounds to the SALT cap for certain owners of passthrough businesses, which file through the individual side of the tax code as S-corporations and partnerships.

Foreign companies and individuals: What became known as the “revenge tax,” a levy on foreign companies and individuals from countries with taxes the US deems unfair, was scrapped amid Wall Street pushback and speculation that the parliamentarian would strike at least parts of it from the bill.

Investors had worried that the tax, formally known as Section 899, would depress asset values and have other unintended consequences. The measure’s removal came after Treasury Secretary Scott Bessent announced a deal with G7 nations to exempt US companies from the 15% global minimum tax.

Hydrogen energy credits: The hydrogen production energy credit was granted a two-year reprieve in the new Senate text, as tax writers pushed back the phase out date from the end of 2025 to the end of 2027.

Small universities: The new tiered university endowment tax proposal was revised in the new Senate version to increase the minimum eligibility threshold for the tax from 500 to 3,000 tuition-paying students. The new formula for calculating endowment size on a per-student basis is simplified.

Losers

Debt hawks: The bill will add trillions to the deficit by traditional scoring methods. Republicans have sought to minimize the appearance of that by promoting an alternative scoring method, but most budget watchdogs call that an accounting gimmick. And the revenue losses could continue to rise, after of recent decisions by the Senate referee who ruled that some of the legislation’s offsets may not be allowed under the expedited procedure Republicans are using to unilaterally pass the legislation.

Electric vehicles: The bill would end the credits for the purchase of electric vehicles at the end of September, earlier than the prior version. The credits for purchasing commercial and used electric vehicles also would go away at the same time.

Wind and solar projects: The legislation accelerates the end dates for wind and solar project credits, compared to the initial Senate proposal, after pushback from President Donald Trump. The latest version would require eligible projects to be “placed in service” by the end 2027.

Direct File: The new Senate tax omits language explicitly terminating the IRS-run free electronic filing program, but keeps in a $15 million pot of funding that creates a task force to study its replacement. The legislation calls for the task force to design a “better public-private partnership” that would replace Direct File and the existing Free File program under which tax-prep companies partner with the IRS to offer free software.