Silver State Times

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 concern arises from two reports released last week.

"Nevada’s small business owners are hanging on by a thread," stated Tray Abney, state director for NFIB in Nevada. "Congress needs to keep the 20% Small Business Deduction from expiring, and one report has some hard numbers showing why."

The NFIB published its 2024 Tax Survey alongside another report produced with EY (Ernst & Young), highlighting the significance of maintaining the Small Business Deduction element of the 2017 Tax Cuts and Jobs Act (TCJA). While corporate tax benefits in the TCJA were made permanent, this deduction was not.

"There were some Nevada-specific numbers on the jobs and GDP to be gained by making the 20% Small Business Deduction permanent," said Abney. "I hope our congressional representatives have taken note."

EY's analysis suggests that extending this tax change could boost US job equivalents at small businesses by about 1.2 million jobs annually over ten years, increasing to 2.4 million thereafter. It also projects an increase in US GDP at small businesses by $75 billion annually over ten years, growing to $150 billion each year after that.

For Nevada specifically, these figures translate to an estimated gain of 12,000 jobs and $659 million in GDP each year for the first decade, rising to 24,000 jobs and $1.3 billion annually after 2035.

The NFIB's Tax Survey indicates potential consequences if the deduction expires: 61% of respondents plan to raise prices; 44% will delay or cancel capital investments; 36% will postpone or cancel hiring; 16% will freeze wages or reduce benefits; and others would adopt various measures.

Jeff Brabant, NFIB’s vice president of Federal Government Relations, addressed the Senate Committee on Finance last Thursday. He urged Congress members to consider their stance on small businesses as essential to America’s economy: "If they truly believe that statement and value small businesses in their communities, then making the 20% small business deduction permanent should be an easy decision."

NFIB represents small business owners across America with typical members employing between one and nine people and reporting gross sales around $500,000 annually.