Nevada’s economy could face challenges if Congress does not extend the 20% Small Business Deduction in the federal tax code, which is set to expire next year. This warning comes from two reports released last week.
Tray Abney, state director for NFIB in Nevada, stated, “Nevada’s small business owners are hanging on by a thread. Congress needs to keep the 20% Small Business Deduction from expiring, and one report has some hard numbers showing why.”
The NFIB released its 2024 Tax Survey alongside another report developed with EY (Ernst & Young), highlighting the significance of maintaining the Small Business Deduction component of the 2017 Tax Cuts and Jobs Act (TCJA). While corporate tax benefits under TCJA are permanent, this deduction is not.
Abney emphasized, “There were some Nevada-specific numbers on the jobs and GDP to be gained by making the 20% Small Business Deduction permanent, and I hope our congressional representatives have taken note.”
EY estimates that extending this tax change could increase US job equivalents at small businesses by about 1.2 million jobs annually for the first decade, eventually rising to 2.4 million each year. Additionally, it could boost US GDP at small businesses by $75 billion annually over ten years, increasing to $150 billion annually thereafter.
For Nevada specifically, these projections translate to an annual gain of 12,000 jobs and $659 million in GDP for the first decade and 24,000 jobs with $1.3 billion in GDP each year after 2035.
NFIB’s Tax Survey revealed potential impacts if the deduction expires: 61% of businesses plan price hikes; 44% may delay or cancel capital investments; 36% might postpone or cancel hiring; while others may freeze wages or reduce benefits.
Jeff Brabant, NFIB’s vice president of Federal Government Relations, testified before the Senate Committee on Finance last Thursday. He concluded his remarks urging Congress to consider whether they truly believe that “small businesses are the backbone of America.” If so, he argued that making this deduction permanent should be straightforward.
Typically, NFIB members employ between one and nine people with gross sales around $500,000 annually. Further details can be found in NFIB’s latest economic trends and jobs reports.
For ongoing updates on Nevada small-business news visit www.nfib.com/nevada or follow @NFIB_NV on X.
###
