The National Federation of Independent Business (NFIB), Indiana’s leading small business advocacy organization, released a new report outlining the benefits the 20% Small Business Tax Deduction will bring to Indiana if it is made permanent. The report also highlights that the 569,000 small businesses in Indiana could face significantly higher taxes if Congress does not make the 20% Small Business Deduction permanent. The report outlines the severe consequences for small businesses in Indiana 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 highlights a stark contrast in tax rates between small businesses and their larger corporate competitors if the deduction is not made permanent. In Indiana, the C-Corp tax rate would remain at 25.9%, while the small business rate would surge to 42.6%.

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, Indiana is projected to gain 27,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $1.35 billion for the first decade and $2.79 billion per year beyond 2035.

View the report for Indiana here.

“Small businesses don’t just create jobs – they create opportunity, innovation, and strong local economies,” said NFIB Indiana State Director Natalie Robinson. “If Congress allows the 20% Small Business Deduction to expire, Indiana’s small businesses will face a massive federal tax hike. This Tax Day, lawmakers in Washington, D.C. should prioritize Main Street and protect small businesses from this tax increase before it expires later this year.”

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.

For more information about NFIB’s advocacy efforts and to access Indiana’s report, visit: www.nfib.com/stopsmallbiztaxhike.