The National Federation of Independent Business (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 Minnesota if made permanent. The report also spotlights that the 547,000+ small businesses in Minnesota 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 Minnesota 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 Minnesota, the C-Corp tax rate would remain at 30.8% while the small business rate would surge to 49.5%.

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, Minnesota is projected to gain 25,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $1.43 billion for the first decade and $2.95 billion per year beyond 2035.

View the report for Minnesota here.

“Minnesota small businesses have a lot on their hands with rising costs, burdensome regulations, and workforce shortages,” said NFIB Minnesota State Director Jon Boesche. “If Congress allows the 20% Small Business Deduction to expire, the massive tax hike will exacerbate the struggle many small business owners face. Congress must act quickly to protect our small businesses.”

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 Minnesota’s report visit:  https://www.nfib.com/wp-content/uploads/2025/04/NFIB-20-Small-Business-Deduction-Impact-MN.pdf

To learn more about what NFIB is doing to engage your federal lawmakers with the 20% Small Business Deduction, sign up for our FREE webinar on Tuesday April 29th!