Sen. Steve Daines has reintroduced the Main Street Tax Certainty Act, which would make a 20% tax reduction for pass-through businesses permanent, cementing a tax reduction for small businesses that is set to expire in 2025.
Brad Close, president of the National Federation of Independent Business (NFIB), a small business advocacy organization, applauded the move and called on House lawmakers to consider the bill as well.
“As small businesses manage economic headwinds, Congress has the opportunity to pass legislation that would provide tax certainty for Main Street by making the Small Business Deduction permanent,” Close said in a release on the NFIB website. “Unlike the corporate rate, the Small Business Deduction is set to expire in 2025 and its elimination would cause small businesses to curtail their hiring and growth plans. We are encouraged that Senator Steve Daines re-introduced the Main Street Tax Certainty Act in the Senate and urge members of the U.S. House to quickly follow.”
The 20% tax reduction is set to expire in 2025 unless Congress takes action, Daines' office reported. Ninety-eight percent of all businesses in the U.S. are "pass-through businesses," employing 50% of American workers. “Montana small businesses are the heartbeat of our Montana communities and providing them much-needed tax relief will help our economy flourish,” Daines said in the release. “Making this tax deduction permanent will help Montana small businesses thrive, create jobs and expand their operations.” If Congress does not act, small businesses might be forced to reduce their employees' wages or make staff reductions.
An NFIB survey found that tax and tax-related issues are a top concern of small business owners, and another found that 48% of respondents said uncertainty related to expiring tax provisions is having an impact on their current or future plans for their businesses.
"Small and medium manufacturers, often organized as pass-through entities, are the backbone of the American supply chain," Chris Netram, the Managing Vice President of Tax and Domestic Economic Policy for the National Association of Manufacturers, said in a release. "Section 199A allows pass-throughs to deduct 20% of their qualified business income, enhancing the ability of small firms to reinvest in their businesses and their workers and increasing the resilience of manufacturers in America."
