The 2025 state legislative sessions convened earlier this year with all fifty states in regular session. Like previous sessions, state lawmakers have considered various proposals impacting small businesses, ranging from taxes and unemployment insurance to swipe fees, extreme temperature standards, minimum wage, and paid leave.

• Taxes – Over the past four years, 25 states enacted measures reducing individual income tax rates. This year, state lawmakers have continued to build on their efforts to provide tax relief. In Kentucky, Governor Beshear signed a bill lowering the state’s individual income tax rate from 4% to 3.5%. In Idaho, the governor signed legislation reducing the income tax from 5.7% to 5.3%. Other states considering income tax cuts include Mississippi, Missouri, Indiana, and Kansas. Conversely, faced with budget shortfalls, some states are considering proposals to increase taxes. Last month, NFIB launched a digital and radio ad campaign opposing the tax increase measure in Maryland.

• Bans on Employer-Sponsored Meetings – A growing number of states have considered proposals prohibiting employers from holding employer-sponsored meetings to discuss unionization. Such proposals have been introduced in Maryland, Delaware, New Mexico, New Jersey, Rhode Island, Kentucky, and Pennsylvania. New Mexico’s proposal was defeated earlier this year. Similar laws in Minnesota, California, Connecticut, and Illinois have faced legal challenges.

• Credit Card Swipe Fees – Legislators in at least 11 states have introduced measures to remove the sales tax from the calculation of swipe fees to alleviate costs associated with credit card transactions. Fees range between 2% and 4%, and merchants pay on each credit or debit card transaction. States considering swipe fee measures include Colorado, Maryland, Indiana, Idaho, Massachusetts, Kansas, and Arizona. Illinois became the first state to pass a swipe fees proposal last year.

• Unemployment Insurance (UI) Benefits for Striking Workers – Proposals providing UI benefits to striking workers have been introduced in several states. Such proposals present challenges for small businesses as expansion of UI benefits threatens to increase taxes on employers. Oregon, Washington, Connecticut, Delaware, and Massachusetts are among the states considering expanding UI benefits. NFIB successfully defeated a bill in Hawaii providing benefits to striking workers. As of April 2025, New Jersey and New York are the only states that extend UI benefits to striking workers. These proposals are considered a violation of federal law.

• Extreme Temperature Standards – More than ten states introduced proposals establishing extreme temperature standards to prevent heat and cold-related illnesses in the workplace. Such proposals require employers to create and maintain temperature-related illness prevention plans, provide training on heat illness injuries, and monitor workplace temperatures. States considering temperature standards include New Jersey, New York, Illinois, Arizona, and Vermont. Currently, the states of California, Maryland, Minnesota, Nevada, Oregon, and Washington have laws in place establishing extreme temperature standards.

• Mandated Paid Leave – As of April 2025, 18 states have paid sick leave programs in place. The programs vary and are largely funded through payroll taxes on employers and employees. This year, to ease the burden on small businesses, lawmakers in Nebraska are considering a proposal to amend the state’s paid leave law to exempt small businesses. In Missouri, lawmakers are considering a proposal to repeal the state’s paid leave program. Additionally, several states introduced proposals to establish paid leave programs. NFIB successfully defeated measures in New Mexico, Virginia, and Hawaii.

• Minimum Wage – Earlier this year, 21 states increased their minimum wage rates. Washington has the highest minimum wage rate of $16.66, followed by California, Connecticut, New Jersey, and New York with rates above $15 per hour. In Rhode Island, lawmakers are considering a proposal to gradually raise the state’s minimum wage from $15 per hour to $20 by 2030. In Vermont, a proposal has been introduced to raise the state’s minimum wage from $14 to $18 per hour. Proposals that would have raised the minimum wage to $25 per hour in Washington, $15 in Virginia (vetoed), and $17 in New Mexico were defeated.