Beehive State News

The National Federation of Independent Business (NFIB) has highlighted potential benefits for Utah if Congress makes the 20% Small Business Deduction a permanent part of the U.S. tax code. This deduction is currently set to expire at the end of 2025.

According to NFIB, making this deduction permanent would address fairness issues in tax policy since big corporations received permanent breaks under the same law that created this deduction. Two recent reports suggest significant economic benefits for states like Utah if the deduction remains in place.

The 2024 NFIB Tax Survey and a report from EY (Ernst & Young) emphasize the broader impact on state economies. EY's findings suggest that maintaining this tax change could result in an average increase of 1.2 million job equivalents at small businesses annually, growing to 2.4 million jobs each year after ten years. Furthermore, it could raise the U.S. GDP at small businesses by $75 billion annually for the first decade and up to $150 billion each year thereafter.

Specifically for Utah, these figures translate to an annual addition of 16,000 jobs and $816 million in GDP during the first decade, with increases to 30,000 jobs and $1.7 billion each year after 2035.

The NFIB survey also revealed potential consequences if the deduction expires: 61% of respondents might raise prices, 44% may delay or cancel capital investments, and other impacts include postponing hiring or reducing employee benefits.

Jeff Brabant, NFIB’s vice president of Federal Government Relations, testified before the Senate Committee on Finance emphasizing the importance of supporting 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.”

NFIB continues its advocacy for small and independent business owners across America as a nonprofit organization dedicated exclusively to their interests since its founding in 1943.