Key Findings of NFIB Report

The National Federation of Independent Business (NFIB) recently released a report detailing significant advantages tied to making the 20% Small Business Tax Deduction a permanent fixture. This tax provision is essential for small businesses across the state, with over 333,000 currently operating in Nevada.

The report warns that without legislative action to preserve this deduction, Nevada’s small business owners will face a drastic tax increase. This increase could hinder economic growth and place extensive financial burdens on local enterprises.

Tax Implications on Small Businesses

A critical highlight of the report is the alarming disparity in tax rates that will emerge should the deduction expire. Currently, large corporations in Nevada benefit from a C-Corporation tax rate of 21%. In contrast, if the small business deduction is not extended, small business tax rates could rise dramatically to 39.6%.

Economic Benefits of the Deduction

Retaining the 20% Small Business Tax Deduction is projected to yield substantial economic benefits for Nevada. Over the next decade, this provision is expected to create approximately 12,000 new jobs annually and contribute an estimated $659 million to the state’s GDP in the first ten years. Following that period, the annual GDP contribution is forecasted to reach around $1.36 billion.

Call to Action

“Small businesses don’t just create jobs—they create opportunity, innovation, and strong local economies,” remarked Tray Abney, NFIB Nevada State Director. “If Congress allows the 20% Small Business Deduction to expire, a massive tax hike on small businesses will take effect.” Abney emphasizes that this change would stifle growth, limit hiring, and jeopardize many local businesses.

The 20% Small Business Tax Deduction was a pivotal component of the Tax Cuts and Jobs Act of 2017, providing small business owners with the resources needed to expand their operations, hire new staff, and support wage increases. Without a permanent solution from Congress, it is predicted that nearly 90% of small businesses will confront significantly higher tax obligations.

Stay Informed

To keep up with developments affecting small businesses in Nevada, visit NFIB’s official site or follow NFIB on social media platforms for timely updates.