Money managers, private equity executives, bankers and Wall Street brokers collectively let out a sigh of relief Thursday afternoon.
It came after U.S. Treasury Secretary Scott Bessent asked the Senate to remove Section 899, which had come to be known as the “revenge tax,” from the White House’s signature budget bill.
The Senate Finance Committee quickly issued a statement confirming it would pull the provision from the One Big Beautiful Bill, which is expected to be voted on Friday.
That is a massive victory for real estate, which had taken to Capitol Hill in recent weeks to press for exemptions to the provision that would have added a new tax on most investment from foreign countries that were deemed to have unfair tax policies.
“This is an ideal outcome that is a win for everyone,” David McCarthy, the head of legislative affairs at the CRE Finance Council, told Bisnow Thursday. “It’s a win for the administration, Congress's goals in terms of protecting the U.S. tax base from erosion, a win for foreign investment into the United States, and a win for our industry by having stability and predictability.”
Section 899 was included as a response to tax policy in other countries that the United States considers anticompetitive and unfair. The objectionable policies include the digital service taxes that have been gaining traction in Europe, as well as taxes enforced by Canada, Japan, Australia and a host of other countries.
If Section 899 was adopted, equity and debt investments from those countries would have been subject to a 5% tax in 2026 that would have risen by 5% annually, up to 20% or until the offending country changed its tax policy.
More than a dozen commercial real estate industry groups had been calling for exemptions for certain types of investment prior to Bessent’s announcement, resigned to the idea that Republicans saw Section 899 as a necessary arrow in the quiver of the trade policy fight.
But Bessent said on X that he had secured commitments from G7 countries that the U.S. would be exempt from minimum tax rates agreed to by 138 countries in 2023, but not the United States.
“Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill,” Bessent wrote in a thread on X. “This understanding with our G7 partners provides greater certainty and stability for the global economy and will enhance growth and investment in the United States and beyond.”
By reversing the Biden Administration’s unwise commitments, we are now protecting our Nation’s authority to enact tax policies that serve the interests of American businesses and workers.
— Treasury Secretary Scott Bessent (@SecScottBessent) June 26, 2025
We are also preserving our tax base, preventing the loss of over $100 billion in American…
Section 899 was explicitly inside the bill to give the Trump administration more leverage and bargaining power over European allies and other countries, lobbyists told Bisnow this week. For that reason, until today, there was an expectation that the provision would survive in some form and make it to the president’s desk for signature.
Senators continue to battle over huge portions of the One Big Beautiful Bill, including major pieces of Medicaid policy, as they push for a floor vote on the bill by Friday. The Senate and House of Representatives will still need to address differences in their legislation and pass the final bill before sending it to the president’s desk.
Trump has set a July 4 target to have the bill passed, and he warned his colleagues on Capitol Hill not to leave Washington for summer vacation without a vote.
