Tax insight

Senate Finance Chairman Crapo releases substitute for House-passed tax package

  • Insight
  • 5 minute read
  • June 17, 2025

What happened? 

Senate Finance Committee Chairman Mike Crapo (R-ID) on June 16 released a Senate reconciliation tax package, which is intended to operate as the Finance Committee portion of a Senate substitute for the tax provisions approved by the House as part of H.R. 1, the “One Big Beautiful Bill Act.” (Chairman Crapo’s substitute amendment). The package includes proposed legislative text, a section-by-section summary, and a bill overview (see below for more information). Chairman Crapo’s reconciliation package also includes proposed changes to Medicaid and Medicare. 

Chairman Crapo’s substitute amendment would modify and make permanent certain 2017 “Tax Cuts and Jobs Act” (TCJA) business, international, and individual tax provisions. The Chairman’s substitute amendment also includes Senate versions of proposals addressing tax relief proposals advanced by President Donald J. Trump, the House-proposed Section 899 to address “unfair” foreign taxes (with significant modifications), and various revenue-raising measures intended to offset part of the cost of the tax package.  

Observation: Chairman Crapo’s substitute amendment differs significantly from the House-passed version of H.R. 1. Key differences include a broader range of proposed changes to US international tax rules, alternative proposals to phase-out certain Inflation Reduction Act (IRA) clean energy tax credits, and a proposal to maintain a modified version of the current $10,000 cap on individual deductions for certain state and local taxes (SALT), instead of increasing the SALT cap to $40,000 as the House bill proposes. Senate differences with the House-passed bill are expected to be the focus of ongoing talks with House Republicans. A Finance Committee release notes in particular that the SALT cap “is the subject of continuing negotiations.” 

The full Senate currently appears to be on track to consider changes to H.R. 1 by the week of June 23. Other Senate chairmen also have been releasing substitute bill text for other parts of H.R. 1. The Senate will be considering H.R. 1 under reconciliation procedures that would allow the legislation to be approved by a simple majority with only Republican votes, instead of the 60-vote majority typically needed to consider bills in the Senate.

Why is it relevant?

Republican Congressional leaders have set a goal of sending a final bill to be signed by President Trump before Congress begins a July 4 recess, but efforts to enact a 2025 reconciliation bill could continue into July. The House and Senate will have to agree on a final identical version of H.R. 1 that can be approved by both chambers.  

Action to consider 

Business leaders and individuals will need to quickly evaluate the potential effect of the Senate’s proposed changes to H.R. 1 as passed by the House on the US economy, business, and individuals, and consider whether to pursue opportunities to modify the legislation as it advances further in the US Congress.   

Senate Finance Chairman Crapo releases substitute for House-passed tax package

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Ed Geils

Ed Geils

Global and US Tax Knowledge Management Leader, PwC US

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