Georgia NFIB member Alison Couch testified this week before the U.S. House Committee on Ways & Means about why Congress should make the 20% Small Business Deduction (Section 199A) permanent.

Couch, owner of Ignite Accounting and Business Advisors in Harlem, Ga., and an NFIB Georgia Leadership Council member, also answered questions from committee members about how Section 199A has been the single most beneficial tax deduction for small business owners and their communities.

On Tuesday, Jan. 14, Couch testified:

“In my April 2023 testimony, I underscored the need for Congress to act to preserve the 20% Small Business Deduction.  In that testimony, I stated that the tax burden on small businesses was already incredibly heavy and allowing this deduction to lapse when it has been in place for many years would not feel like a sunset, but like a tax increase.  Today, with this section of the tax code set to expire in less than one year, this remains true, and I urge Congress to act swiftly to renew it.  The small businesses that I work with have become dependent on having access to those funds, and they need the certainty provided by making the 20% Small Business deduction permanent.”

Rep. David Kustoff (TN-08) asked Couch how significant Section 199A has been for small business owners in hiring employees and providing wages and benefits. Couch responded:

“199A has provided tax relief to free up cash flow that’s been reinvested in small business by the owners. And as I mentioned in my testimony that small business owners’ income is different from business income. The owners take profits and invest them back into their businesses and that’s done by way of raises and hiring additional employees. They also use that money to invest in software purchases and things of that nature. But they also give money to the T-ball teams, they sponsor youth trips, they really invest it back into their communities as well. And that’s something that we can’t ignore and that I’m afraid would be some of the first things to be cut if that deduction expired.”

Rep. Greg Steube (FL-17) asked about Section 199A’s real-world impact on employees and customers. Couch said:

“My typical client earns gross revenue under $3 million a year, employees, 10 or less employees. So, we’re talking about coffee shops, we’re talking about ice cream shops, restaurants, professional service business owners, the real heartbeat of the American economy. And I have seen 199A have the greatest impact on that segment of business owners more so than any other form of tax relief in my 21 years in practice. So, it frees up cash flow to reinvest in employees, to reinvest in equipment and software. And as mentioned earlier, I think that it really provides a little bit of cash flow to give back to the community.”

Representative Steube also asked how small businesses would respond if Section 199A were allowed to expire. Couch answered:

“If 199A expires, it will feel like a tax increase on small business owners instead of a sunset of a tax deduction. And so, what you will see as a result of that is the inability to provide raises, the inability to invest in new equipment, the inability to really R&D and different things of that nature that is so crucial when you own a small business. And quite frankly, I think that it will cost some small business owners their businesses. I think it is that impactful.”

Read Couch’s full testimony here. Watch her opening remarks and line of questioning here.