The FDII & Expensing Windfall
5 of 7 filers across 2 sectors are noting regulatory exposure. First surfaced in 2025Q1, accelerating sharply by 2025Q2. Consensus hardened: 2025Q2 was 75% neutral; 2026Q1 now 100%. Primarily a regulatory story (80%), with a cost overlay (20%). Present-tense — companies describing what is happening now. Recent filings describe "2025 Tax Act makes changes including 100% accelerated depreciation deductions, immediate expensing of domestic R&D costs." Still gaining momentum.
U.S. companies are lowering effective tax rates by exploiting Foreign Derived Intangible Income deductions, immediate R&D expensing, and accelerated depreciation provisions enacted in 2025 tax legislation.
DISTINCT NEW FILERS PER QUARTER
✦ WHAT THE DIFF CAUGHT
Language shifts from prospective tax-rate guidance (HWM forward-looking) to concrete realization of benefits (HWM/AMZN current/backward), signaling the legislation has moved from announced to operative.
REPRESENTATIVE SIGNAL FROM FILINGS
“2025 Tax Act makes changes including 100% accelerated depreciation deductions, immediate expensing of domestic R&D costs”
The 2025 Tax Act reinstates 100% accelerated depreciation and enables immediate expensing of domestic R&D costs, retroactively applied from January 2025.
“The One Big Beautiful Bill Act of 2025 includes changes to the U.S. corporate income tax system including immediate expensing of R&D expenses”
New U.S. tax legislation permits immediate expensing of qualifying R&D expenses and extends certain prior tax provisions, with provisions effective for Nike beginning fiscal 2026.
DRIVERS