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 North Carolina if made permanent.

The report also spotlights that the 1.1 million small businesses in North Carolina 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 North Carolina 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 North Carolina, the C-Corp tax rate would remain at 23.25%, while the small business rate would surge to 43.85%.

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, North Carolina is projected to gain 37,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $1.82 billion for the first decade and $3.76 billion per year beyond 2035.

View the report for North Carolina here.

“This deduction has been a big help to North Carolina’s small businesses,” NFIB State Director Gregg Thompson said. “Main Street businesses are dealing with rising prices and other uncertainties. If this deduction is allowed to expire, local businesses will see a steep increase in taxes, making it even harder for them to stay in business, keep people working, 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.