Trump Tax Law and Its Impact on AEC Sector

Washington – August 8, 2025 – In a legislative move with far-reaching consequences, President Donald Trump last month signed the One Big Beautiful Bill Act, a sweeping tax reform that extends well beyond economics to directly impact architecture firms, design studios, and construction companies across the country.

The 870-page bill revises several tax provisions tied to the architecture, engineering, and construction (AEC) sector, opening more room for investment in projects while simultaneously removing some incentives related to sustainable design and energy efficiency.

Tax Changes Driving Architectural Investment

Among the most notable measures is the reinstatement of same-year expensing for qualified domestic research costs—a long-awaited change for architecture firms that rely on in-house design and R&D teams to develop innovative solutions.
The bill also expands accelerated spending allowances for infrastructure and equipment and makes the Qualified Business Income (QBI) deduction permanent, giving developers and studios greater ability to plan long-term projects with financial certainty.

Cranes operating at an urban development project linked to the architecture and engineering sector. — Construction cranes at an urban project likely to see increased investment under the new tax changes.

Loss of Sustainable Energy Incentives

On the other hand, the law eliminates the 179D deduction and several tax credits linked to energy efficiency, a move that could slow the adoption of green building practices in the U.S.
Industry experts warn that without these incentives, some developers may scale back investments in sustainability, particularly given the current high financing costs.

Architectural Outlook

Observers expect the changes to shape two parallel trends: a surge in traditional commercial and residential developments backed by tax relief, and a slowdown in sustainable architectural projects that previously benefited from now-removed incentives.
For design firms, reduced tax burdens could encourage talent recruitment and the expansion of project teams, especially in cities experiencing high development activity.

✦ ArchUp Editorial Insight

The article examines the impact of the new U.S. tax law on architectural practice, highlighting changes that reshape investment strategies in design and construction. It outlines how the removal of certain sustainable energy incentives may curb green architecture adoption, while other provisions could accelerate traditional development. Although the analysis presents the economic dimensions clearly, it engages with architectural implications only briefly, leaving room for deeper exploration of spatial and contextual identity. Nevertheless, it offers valuable insight into potential shifts within the American architectural landscape, serving as a reference point for future project planning and design strategies.

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