Companies across all industries and sectors would pay an average effective tax rate of 9% next year under the Republican tax-overhaul bill, a Penn Wharton Budget Model study said on Tuesday.

By 2027, that average effective rate would double to 18% — because of some corporate tax breaks that would move off the books, according to researchers for the economic policy center at the University of Pennsylvania’s Wharton School of Business.

The bill would cut the corporate tax rate to 21% — down from 35% currently — but the study examined how its various changes would affect the actual taxes companies pay on their pretax income. Because of differing deductions and tax strategies, a company’s effective tax rate can vary greatly from the “statutory” rate. Currently, U.S. companies pay an average effective rate of 21%, according to the Penn Wharton report.

Utilities, real estate, transportation, agriculture and health services companies would see the biggest effective rate drops in the initial years after the bill becomes law, due to a provision that would allow companies to fully and immediately deduct the cost of certain equipment purchases until Jan. 1, 2023. Under current law, businesses must spread out those costs over several years. 

The amount that could be deducted would phase down beginning in 2023, giving capital-intensive industries average effective rates above 21% by 2027, according to the study. Utilities, for example, would pay an effective rate of 15.62% in 2018, down from their current 28.83%. But that would rise to 23.43 in 2023 and to 24.64% in 2027, the study says.

Average effective rates for finance and insurance companies would fall to 14.3% next year, from a current 26.08%. Then in 2023 and 2027, they’d rise to just under 21%.

That’s because of a provision that limits the deductions companies can take on their net interest expenses. The deduction would be limited to 30% of a business’s “adjusted taxable income,” though amounts over could be carried forward.

In 2018 through 2021, the income measure would be Ebitda or earnings before interest, taxes, depreciation and amortization. But in subsequent years, it would be earnings only before interest and taxes — a less generous measure, according to tax experts.

— Check out How Tax Bill Impacts 4 Key Areas for Advisors & Clients on ThinkAdvisor.

Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.