News

Proposed Section 899 Retaliatory Tax Withdrawn 

June 27, 2025





Treasury Secretary Scott Bessent on June 26 posted on X.com that he has asked Congress to remove the Section 899 retaliatory tax from the One Big Beautiful Bill Act (OBBB). 

Chairmen of the congressional tax committees, Rep. Jason Smith (R-MO) and Sen. Mike Crapo (R-ID) issued a statement shortly after confirming the removal of the provision: 

We applaud President Trump and his team for protecting the interests of American workers and businesses after years of congressional Republicans sounding the alarm on the Biden Administration’s unilateral global tax surrender under Pillar 2. Reaching a joint understanding with the G7 means the U.S. can reclaim tens of billions of dollars that had been ceded from our tax base by Democrats’ America-Last policy.
Why it matters: Section 899 was a provision in the OBBB that would have imposed retaliatory income taxes on foreign investments and companies in the U.S. Click here for more background on the issue.
 
  • CREFC and other real estate trade groups raised concerns the provision could chill investment in U.S. real estate debt and equity through a combination of increased costs and uncertainty as to whether the tax will apply to certain countries. Click here for the letter.
  • The global tax deal agreement helps accomplish policymakers’ goals of fair international tax treatment while avoiding negative consequences to inbound U.S. investment. 

What they’re saying: CREFC and other industry groups worked to sound the alarm on potential unintended consequences of the provision after it passed the House and survived in a first draft of the Senate text. See below for a selection of press coverage on the issue highlighting commercial real estate:

The bottom line: The global tax agreement and removal of Section 899 are positive developments for the industry and should provide greater certainty to international investors deploying capital in the U.S. 

  • Congress is still aiming for a July 4th date to deliver the OBBB to President Donald Trump.
  • Lawmakers still must resolve SALT, energy credits, and Medicaid disagreements among their membership, but they remain optimistic on passage by Independence Day.

CREFC will continue to monitor the progress of the OBBB and let members know of any provisions that may impact CRE finance markets.

Contact David McCarthy (dmccarthy@crefc.org) with questions. 

Contact  

David McCarthy
Managing Director,
Chief Lobbyist, Head of Legislative Affairs
202.448.0855
dmccarthy@crefc.org
The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2025 CRE Finance Council. All rights reserved.

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