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 Tennessee if made permanent.

The report also spotlights that the 711,000 small businesses in Tennessee 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 Tennessee 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 Tennessee, the C-Corp tax rate would remain at 27.5%, while the small business rate would surge to 39.6%.

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, Tennessee is projected to gain 23,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $1.16 billion for the first decade and $2.4 billion per year beyond 2035.

View the report for Tennessee here.

“The 20% Small Business Tax Deduction has been a lifeline for Main Street businesses across our state,” NFIB State Director Jim Brown said. “Without it, countless small business owners will face a steep tax hike at a time when they’re already dealing with labor shortages and rising costs. Making this deduction permanent isn’t just good tax policy. It’s critical to ensuring small businesses can continue creating jobs and supporting local 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.