Show-Me State Times

Small business owners will face a significant tax increase if Congress does not act by the end of next year. According to the National Federation of Independent Business (NFIB), three out of four of America’s small businesses benefit from a 20% pass-through deduction, a key component in the 2017 federal tax reform bill. Data from the IRS indicates that the collective tax benefit of this deduction is more than $2.6 billion in Missouri.

However, this tax benefit is scheduled to expire at the end of 2025.

The Missouri Chamber of Commerce and Industry is joining forces with the U.S. Chamber, NFIB, and other national organizations to urge Congress to pass the Main Street Tax Certainty Act, which would make the 20% pass-through deduction permanent.

This deduction allows eligible taxpayers to deduct up to 20% of their qualified business income (QBI), plus 20% of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income.

Entities eligible for the QBI deduction include:

- Sole proprietorships

- Partnerships

- S-Corporations

- Limited liability companies (LLCs)

Some small business owners have stated that this deduction has helped them keep their operations running, invest in new equipment, provide greater benefits for their employees, and create new jobs.

To learn more, contact Phillip Arnzen, director of legislative affairs for the Missouri Chamber, at parnzen@mochamber.com or call (573) 634-3511.