U.S. companies reap huge tax reform advantages, cash flow soars by billions of dollars.

Companies are praising Trump's new tax law for helping to boost consumer spending. The "Big Beautiful Bill" (OBBB) will help release funds. The provisions in this law allow all types of companies from large healthcare company Johnson & Johnson (JNJ.US) to technology consulting firm Booz Allen Hamilton (BAH.US) to immediately include domestic capital costs as expenses. Jan Lewis, Vice Chairman of the American Institute of Certified Public Accountants, said in an interview, "This provides a clear advantage for domestic research and development work. And if these research and development costs occur outside the United States, these costs still need to be capitalized and amortized." While many companies have not yet indicated what actions they will take, last month's tax legislation has helped alleviate some concerns as these companies are dealing with tariff uncertainty. In the Russell 3000 Index companies that have reported earnings so far this quarter, 19% of companies mentioned this new regulation in their conference calls. Now, American companies can fully deduct the expenses of research and development, new equipment, and property, without having to amortize deductions over several years. This move can save companies money and encourage them to make equipment purchases and facility upgrades faster. Johnson & Johnson stated that the tax law is beneficial for its previously announced $550 billion investment plan in the United States, providing certainty on tariff issues. Johnson & Johnson's CEO said, "It's still difficult to predict the eventual outcomes of the tariff policy, but what we can be certain of is that the recently passed tax policy has created job opportunities in the United States and stimulated innovation." Lewis said, "If you can deduct equipment costs of millions or even tens of millions of dollars from taxable income, your taxable income will decrease and your tax burden will be lighter. From a financial statement perspective, this is beneficial for you." AT&T Inc. CFO Pascal Desroches said in a conference call that the company is expected to save up to $8 billion in cash taxes from 2025 to 2027, and plans to use about $3.5 billion to expand its fiber network. Executives from truck manufacturer PACCAR Inc. and aerospace and defense manufacturer General Dynamics Corporation stated in their respective earnings conference calls that they are receiving more business consultations now that funds have been released. PACCAR Inc. CEO Preston Feight said, "Their ability to use this fund for capital assets like trucks is becoming more of a focus and is part of our optimism for the second half of the year." The company has estimated that component sales will increase by 4% to 6% this quarter, exceeding the past three quarters. General Dynamics Corporation CEO Phebe Novakovic said the company's good "order-to-ship ratio" has largely benefited from bonus depreciation policies. Booz Allen Hamilton and United Rentals, Inc. have raised their free cash flow expectations by $200 million and $400 million respectively due to tax incentives. Northrop Grumman Corporation said it will receive $2 billion to $2.5 billion in cash tax benefits this year, while Roper Technologies, Inc. said it will pay $150 million less in taxes this year and expects to receive $120 million in tax benefits next year. Some companies, such as Ford Motor Company and Sherwin-Williams, are still evaluating their financial impact. Others, like Boeing, do not expect significant impact this year. The law may prompt companies to increase their business scale in the US, but this could also raise costs. Mark Koziel, CEO of the American Institute of Certified Public Accountants, said in an interview, "There are still negotiations on tariffs, which makes the situation more complex. You can't look at this issue in isolation, you can't say these companies will all have a lot of cash, use that cash for various expenses, and earn more than the previous year."