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 Virginia if made permanent.

The report also spotlights that the 850,000 small businesses in Virginia 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 Virginia 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 Virginia, the C-Corp tax rate would remain at 27%, while the small business rate would surge to 45.35%.

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, Virginia is projected to gain 33,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $1.9 billion for the first decade and $3.94 billion per year beyond 2035.

View the report for Virginia here.

“The 20% Small Business Tax Deduction has made a big difference to Virginia’s small businesses these past few years,” NFIB State Director Julia Hammond said. “It helped provide much-needed financial relief as they dealt with inflation, labor shortages, and rising costs. If this deduction expires, Main Street businesses would face a steep tax hike on top of everything else, making it even harder for them to grow, create jobs, and support their communities.”

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.