Gem State Wire

For some, ensuring the continuation of the 20% Small Business Deduction in the tax code is seen as a matter of fairness. While large corporations received permanent tax breaks, small businesses face the potential expiration of this deduction next year. Recent reports have highlighted how state economies could benefit if this deduction remains in place.

Suzanne Budge, state director for NFIB in Idaho, emphasized the importance of this issue: “One report had some Idaho-specific numbers, and the boon to our state’s economy from making the Small Business Deduction permanent should be welcomed and embraced by every policymaker,” she said. “Congress should act on this immediately and resolutely.”

The NFIB released its 2024 Tax Survey last Thursday, alongside a report produced with Ernst & Young (EY), which underscored the significance of maintaining the Small Business Deduction from the 2017 Tax Cuts and Jobs Act (TCJA). Unlike corporate tax benefits that were made permanent under TCJA, this deduction is set to expire.

According to EY's findings, "The tax change is estimated to increase US job equivalents at small businesses by approximately 1.2 million jobs, on average, in each of the first ten years and growing over time to 2.4 million each year after that." Additionally, extending Section 199A permanently could boost US GDP at small businesses by $75 billion annually over ten years and up to $150 billion annually thereafter.

Idaho stands to gain significantly from these changes with projections showing an addition of 9,000 jobs and $397 million in GDP each year for the first decade. After 2035, these figures are expected to rise to 17,000 jobs and $820 million annually.

NFIB’s survey also revealed potential impacts if the deduction expires: 61% plan price increases; 44% may delay or cancel capital investments; 36% might postpone hiring; while others could freeze wages or reduce benefits.

Jeff Brabant, NFIB’s vice president of Federal Government Relations, testified before the Senate Committee on Finance last Thursday. He urged lawmakers to consider their stance on small businesses: “Members of Congress should ask themselves if they really believe it when they say ‘small businesses are the backbone of America.’ If they truly believe that statement and value small businesses in their communities, then making the 20% small business deduction permanent should be an easy decision.”

Typically employing between one and nine people with gross sales around $500,000 annually per member business, NFIB continues its advocacy for small enterprises across America.