NFIB, the nation’s leading small business advocacy organization, said today it applauds the decision from the U.S. District Court for the Northern District of Texas in the case Texas v. Yellen, allowing Louisiana, Texas, and Mississippi to use funds from the American Rescue Plan Act for tax relief. NFIB filed an amicus brief in the case arguing the tax mandate was unconstitutional and small businesses needed tax relief following the COVID-19 pandemic and shutdowns.

“Allowing the state to use ARPA funds to offset tax cuts clears a path for legislators to reduce the state income tax rate and ignite Louisiana’s economy,” NFIB State Director Dawn McVea said. 

“This decision is great news for small businesses who are still recovering from the financial damage caused by the pandemic,” said Karen Harned, Executive Director of NFIB’s Small Business Legal Center. “Small businesses are managing various challenges right now including rising inflation and worker shortages and will benefit greatly from tax relief. We are glad the Court agreed that such a mandate was unconstitutional.”

The American Rescue Plan Act of 2021 made funds available to states if and only if states agree not to pass any laws or take any administrative actions that decrease their net revenue, whether that decrease comes through tax credits, rebates, reductions in tax credits, or new or expanded deductions.

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently available in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.