The National Federation of Independent Business (NFIB) has released a report emphasizing the potential benefits and dangers related to the 20% Small Business Tax Deduction in New Hampshire. This tax deduction, crucial for the state’s 142,000 small businesses, might see its expiration, which could lead to significantly higher taxes if Congress does not make it permanent this year.
The report compares the potential tax rate differences, showing that without permanence of the deduction, the tax rate for small businesses could increase to 39.6%, while the C-Corp tax rate would remain at 28.5%. Should the deduction become permanent, New Hampshire could see an annual creation of 6,000 jobs over the next decade and a GDP increase of $345 million annually, with projections doubling beyond 2035.
“Small businesses don’t just create jobs, they create opportunity and strong Main Street communities,” stated NFIB New Hampshire State Director John Reynolds. He warned of the possible negative impact: “If Congress allows the 20% Small Business Deduction to expire, a massive tax hike on New Hampshire’s small businesses will take effect, stifling growth, putting the brakes on hiring, and endangering countless small businesses.”
The 20% Small Business Tax Deduction stems from the Tax Cuts and Jobs Act of 2017, which has allowed many small business owners to expand, hire, and raise wages. The NFIB report suggests that failure to maintain this deduction could drastically increase the tax burden for nine out of 10 small businesses nationwide, posing a threat to jobs and economic stability.
For an in-depth look at the report and additional information on NFIB’s advocacy, interested individuals can access New Hampshire’s breakdown via: NFIB-20-Small-Business-Deduction-Impact-NH.pdf
Since its founding over 80 years ago, NFIB has consistently advocated for America’s small businesses from Washington, D.C., and state capitals, maintaining a nonprofit, nonpartisan, and member-driven approach. Further details can be found on nfib.com.
