The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduced sweeping reforms that reshape how entrepreneurs should prepare for the sale of their businesses. If you’re a business owner in a high-growth industry or an established founder planning a liquidity event, understanding the implications of these tax law changes is critical to maximizing your post-exit wealth.
At Northern Pacific Asset Management, headquartered in Houston and advising clients across the Pacific Northwest and nationwide, we’re helping entrepreneurs seize this moment—tying federal tax advantages together with business valuation, estate planning, and sale strategy.
The OBBBA significantly enhanced the Qualified Small Business Stock (QSBS) exclusion under Section 1202 for stock acquired after July 4, 2025. Key changes include raising the federal tax-free gain cap to $15 million per qualifying shareholder (indexed for inflation in future years), introducing a tiered holding period for partial exclusions, and increasing the qualified small business asset threshold to $75 million.
| QSBS Provision | Before OBBBA | After July 4, 2025 (New Stock) |
|---|---|---|
| Max Exclusion | $10M or 10x basis | $15M (indexed) or 10x basis |
| Holding Period for Exclusion | 5 years (100%) | 3 years (50%), 4 years (75%), 5 years (100%) |
These enhancements are especially relevant for owners in technology, biotech, professional services, and private healthcare. Clients in Seattle, Portland, and Houston are already restructuring equity positions or C-corp entities to qualify under these new provisions. QSBS planning requires careful legal coordination and valuation analysis—elements we routinely lead for privately held firms preparing for exit.
The OBBBA made the 20% Qualified Business Income (QBI) deduction under Section 199A permanent, preventing its scheduled expiration after 2025. This continues to provide valuable tax relief for entrepreneurs operating as S corporations, LLCs, or other pass-through entities, with existing phaseout thresholds and applicability rules.
A credible, comprehensive business valuation is no longer optional—it’s a prerequisite for planning under new federal and state tax regimes. Accurate valuation enables:
Northern Pacific’s valuation service, powered by BizEquity, gives sellers prompt answers and defensible figures—essential for exit timing and post-sale planning.
The OBBBA made permanent and increased the federal estate and gift tax exemption to $15 million per individual ($30 million per couple) starting in 2026, with annual inflation adjustments. This provides greater certainty for affluent sellers recalibrating their wealth transfer plans—especially if they live or own property in states like Washington or Oregon.
Clients in Washington now face an estate tax of up to 35%, while Texas and Florida residents benefit from zero state estate or income tax. Our advisors help families structure trusts in favorable jurisdictions such as Nevada, South Dakota, and Wyoming to bridge the disparity.
“Selling your business isn’t just about finding a buyer. It’s about planning the right structure, in the right state, at the right time. The difference can be measured in millions.”
— Northern Pacific Private Advisory Team
We collaborate across disciplines—coordinating with your CPA, legal team, and M&A counsel—to create a personalized and integrated strategy for your transition. From our Houston headquarters and Pacific Northwest presence, we offer national perspective with regional insight.
Learn more about our services for entrepreneurs navigating liquidity events by visiting our Business Valuation page or scheduling a discovery meeting below.
Northern Pacific Asset Management does not provide tax or legal advice. Please consult with your legal and tax advisors before making any changes to your assets or tax structures. All assumptions and projections are based on publicly available IRS and legislative guidance and are for general illustration only; they do not reflect your individual circumstances, investment growth risk, or the effects of any state or local taxes.
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