NFIB, the nation’s leading small business advocacy organization, released a new report outlining the benefits the 20% Small Business Tax Deduction will bring to Texas if made permanent.

The report also spotlights that the 3.3 million small businesses in Texas could face significantly higher taxes if Congress does not make the 20% Small Business Tax Deduction permanent this year. The report outlines the severe consequences for small businesses in Texas and the broader U.S. economy that would result from the provision’s expiration, highlighting potential economic slowdown and increased financial strain on local businesses.

The report also highlights a stark contrast in tax rates between small businesses and their larger corporate competitors if the deduction is not made permanent. In Texas, the C-Corp tax rate would remain at 21%, while the small business rate would surge to 39.6%.

However, making the deduction permanent would lead to significant economic benefits, leaving the small business tax rate on a level playing field with its competitors. Additionally, Texas is projected to gain 104,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $6.05 billion for the first decade and $12.5 billion per year beyond 2035.

View the report for Texas here.

“If Congress doesn’t prevent this deduction from expiring at the end of 2025, small businesses here and across the country will be looking at a significant tax hike that could stall growth and force owners to make some tough decisions when it comes to growth, jobs, and supporting their communities,” NFIB State Director Jeff Burdett said.

The 20% Small Business Tax Deduction, a key provision of the Tax Cuts and Jobs Act of 2017, has empowered millions of small business owners to expand, hire employees, and increase wages. If Congress does not act to make it permanent this year, nine out of 10 small businesses will face a significantly higher tax burden, threatening jobs and economic stability nationwide.