by Terri DeeIllinois News Connection
A large tax hike could appear soon, that would affect Illinois' small businesses still rebounding from the pandemic. One group hopes Congress will act before two bills expire, and the tax increase takes effect. A small business advocacy group, The National Federation of Independent Businesses (NFIB) says one of them - the 20% Small Business Deduction Act - was created to align small business tax rates with those of larger corporate competitors. The group's Vice President for Federal Government Relations Jeff Brabant said... "It's difficult for small businesses to be able to compete with a lot of their larger competitors, and increasing prices isn't always a great option for them," said Brabant. "If you're an employee and you go to a small employer who may not have the money to be able to offer great benefits, versus a large employer who can offer those benefits, it's always going to put the smaller employer at a little bit of a disadvantage." If Congress decides not to renew the 20% Small Business Deduction Act, Brabant predicted that 90% of America's businesses would face additional barriers to growth and hiring more workers. According to the U.S. Small Business Administration's 2023 Profile report, Illinois has slightly more than 2 million small business employees - which account for 44% of the state's employees. The other law up for review by the House is the Main Street Tax Certainty Act, which permits small businesses to deduct up to 20% of their qualified business income and make it a permanent deduction. Brabant noted that the NFIB strongly supports both measures, which expire on December 31, 2025 - and have bipartisan support. As the country waits to see the presidential election results, he said he believes the plight of small businesses should be the "number one issue" on Congress's mind. "It shouldn't be a Republican or Democratic issue," said Brabant. "This should be 'small businesses are the foundation of the economy,' and I don't think anyone wants to see Main Street businesses have a tax hike." Brabant said the organization is glad both presidential candidates have talked about small businesses, because these discussions don't always occur. He said NFIB's focus is to educate and increase Congress' awareness, and he said he hopes they will act sooner rather than later.
Keywords: Illinois small business tax increase, 20% Small Business Deduction Act, Main Street Tax Certainty Act, Small business tax reform 2025, Impact of tax hike on small businesses
