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 Arkansas if made permanent.

The report also spotlights that the 280,000 small businesses in Arkansas 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 Arkansas 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 Arkansas, the C-Corp tax rate would remain at 25.3%, while the small business rate would surge to 43.5%.

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, Arkansas is projected to gain 10,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $440 million for the first decade and $909 million per year beyond 2035.

View the report for Arkansas here.

“The 20% Small Business Tax Deduction has made a big difference to Arkansas’ small businesses,” NFIB State Director Katie Burns said. “It provided financial relief as local businesses dealt with inflation, labor shortages, and rising costs. If this deduction is allowed to expire, then these Main Street businesses will be faced with a steep tax hike on top of everything else, making it even harder for them to operate and support their communities.”

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.