The United States House of Representatives passed H.R. 1, also known as the "One Big Beautiful Bill Act," by a razor-thin 215-214 margin. It now heads to the U.S. Senate, where it is expected to undergo significant changes.

H.R. 1 is a more complete and updated version of H. Con. Res. 14, which ASA supported in a previous press release. 

As currently written, the Big Beautiful Bill would enact changes to the federal tax code that would likely benefit most automotive repairers, particularly small auto repair businesses.

Below is a summary of the bill's key permanent provisions:

• Make permanent the standard tax deduction for businesses registered as sole proprietorships, S corporations, or partnerships and expand that deduction from 20 percent to 23 percent
• Make permanent the top marginal income tax rate at 37 percent for all income earned over $609,350
• Allow small businesses to deduct 100 percent of investments in certain machinery and equipment for the tax year of the expenditure, thereby avoiding depreciation
• Eliminate nearly all tax credits on purchases of electric vehicles (EV) and significantly scale back EV production incentives
• Increase estate tax and lifetime gift tax exemption to $15 million and adjusting it annually based on inflation
• Make permanent the tax credit for small businesses that provide Paid Family and Medical Leave in states where businesses are not required to provide such leave
• Make permanent the tax credit for small businesses that provide financial support for employees’ childcare
• Make permanent the $2,000 Child Tax Credit
• Increase the standard individual deduction by $1,000
• Increase the cap individuals who make less than $500,000 in a year can deduct for state and local taxes from $10,000 to $40,000

Below is a summary of the bill's key temporary provisions:

• Eliminate taxes employees must pay on overtime compensation - applies to tax years 2025-2028
• Make the Child Tax Credit $2,500 for tax years 2025-2028
• Allow car owners who make less than $100,000/year to deduct up to $10,000 in car loan interest payments for tax years 2025-2028

The United States Senate followed the U.S. House of Representatives and voted 51-44 to pass House Joint Resolution 88, which would overturn California's Advanced Clean Cars (ACC) II Regulation. Senator Elissa Slotkin (D-MI) was the only Democrat to vote in favor of the legislation. It passed on a more bipartisan 246-164 vote in the House. It now awaits action from President Trump, who is expected to sign it into law.

If left intact, ACC II will require that an increasing portion of light-duty vehicles sold in the state are zero-emission vehicles (ZEV), starting with 35 percent in 2026 and 100 percent by 2035.

Even if President Trump signs H.J. Res. 88, it might not become law immediately due to expected legal challenges. The U.S. Senate's parliamentarian ruled that Congress does not have the authority to overturn ACC II under the Congressional Review Act (CRA). Many Republicans argue that the senate parliamentarian's views are not legally binding, which allowed them to hold this vote.

In December, when Joe Biden was still President, the U.S. Environmental Protection Agency (EPA) granted California’s waiver request for ACC II. The federal Clean Air Act permits the EPA to grant waivers to California that allow it to set its own air pollutant emissions standards for new motor vehicles, and it allows states to adopt California's rules under certain conditions. So far, seventeen states and the District of Columbia have adopted California's rules to varying extents. These jurisdictions, including California, accounted for around 40 percent of new vehicle sales in the U.S. in 2023.

Under the Congressional Review Act, Congress can vote to overturn rules finalized by federal agencies. California and supporters of ACC II argue that a waiver doesn't qualify as a rule, and therefore is not subject to the Congressional Review Act. Those in favor of overturning California's waiver argue that a waiver qualifies as a rule.

Click here to read H.J. Res. 88 in its entirety

Click here to find out how your U.S. Representative voted on H.J. Res. 88