Main Street Tax Certainty Act is Back in Congress; Would Make the Small Business Deduction Permanent
The battle to make small business tax relief permanent continues with the reintroduction last week of the bipartisan Main Street Tax Certainty Act in the U.S. House of Representatives and U.S. Senate.
The bipartisan Main Street Tax Certainty Act was reintroduced in Congress Friday by U.S. Senator Steve Daines (R-MT) and U.S. Representatives Jason Smith (R-MO) and Henry Cuellar (D-TX). The purpose of the act is to make the Small Business Deduction a permanent part of the IRS tax code. Without the Main Street Tax Certainty Act, this crucial tax relief for small businesses will end in a few years.
The Small Business Deduction – also known as Section 199A of the IRS tax code – was established in 2017 and allows pass-through businesses to deduct as much as 20% of qualified business income from their taxes. As 90% of small businesses are pass-throughs, this measure was a huge boost to the small business economy in 2018 and 2019.
NFIB research showed that two-thirds of owners felt their business was helped by the deduction, and 82% said they noticed a stronger economy in their community. Following the Small Business Deduction’s passage into law in late 2017, small businesses saw a 45-year high in job creation, compensation increases, profit growth and inventory investment.
However, the Small Business Deduction sunsets in 2025, along with many other tax measures that benefit small businesses. NFIB has advocated to make the deduction permanent, and small business allies in Congress agree.
In 2019, the Main Street Tax Certainty Act was introduced in the U.S. House and Senate, each of them stalling in committee at the time.
Now the Act has been reintroduced before the new 117th Congress. NFIB fully backs this crucial tax relief at a time when small businesses are still trying to recover from the COVID-19 pandemic.
“After emerging through this tumultuous pandemic, the last thing small business owners need is additional uncertainty,” said Kevin Kuhlman, Vice President of NFIB Federal Government Relations. “We commend Senator Steve Daines and Representatives Jason Smith and Henry Cuellar for their continued leadership and assistance to small business owners.”
