Big Sky Times

Montana's economy could experience significant impacts based on Congress's decision regarding the 20% Small Business Deduction in the federal tax code. According to reports released by NFIB and EY, the deduction could either expire or be made permanent.

Ronda Wiggers, state director for NFIB in Montana, stated, "One report put some hard, Montana-specific numbers on this decision," emphasizing the importance of maintaining the deduction.

The 2024 NFIB Tax Survey and a joint report with EY highlight the significance of retaining the Small Business Deduction from the 2017 Tax Cuts and Jobs Act (TCJA). While corporate tax benefits under TCJA are permanent, this particular deduction is at risk of expiration.

EY estimates that extending the tax change would boost US job equivalents at small businesses by approximately 1.2 million jobs annually over the first decade, increasing to 2.4 million each year subsequently. It is also projected to enhance US GDP at small businesses by $75 billion annually initially, rising to $150 billion each year after ten years.

For Montana specifically, these projections translate to an addition of 5,000 jobs and $244 million in GDP annually for the first ten years. After 2035, these figures could rise to 10,000 jobs and $500 million per year.

The NFIB Tax Survey indicates potential adverse effects if the deduction expires: 61% of respondents plan price hikes; 44% may delay or cancel capital investments; 36% might defer hiring; and others foresee wage freezes or benefit reductions.

Jeff Brabant, NFIB’s vice president of Federal Government Relations, addressed the Senate Committee on Finance last Thursday. He urged lawmakers to consider their stance on small businesses as vital to America when deciding on making the deduction permanent.

NFIB represents small business owners nationwide and has been advocating since its founding in 1943. The organization remains committed to supporting independent businesses across all states.