Peach Tree Times

NFIB has issued a report addressing the importance of the 20% Small Business Tax Deduction for the Georgian economy. The deduction, part of the Tax Cuts and Jobs Act of 2017, is at risk if not made permanent by Congress this year. The report details the potential negative impact on Georgia's 1.3 million small businesses, highlighting the likelihood of higher tax rates if the deduction expires.

NFIB describes the potential for an economic downturn and increased financial challenges for local businesses. If the deduction expires, small businesses in Georgia could see their tax rate rise to 45.09%, compared to a maintained rate of 26.39% for larger corporate entities.

On the other hand, making the deduction permanent could align small business tax rates with those of larger corporations, generating substantial economic benefits. Specifically, it is projected that Georgia would see the creation of 39,000 jobs annually over the next decade, coupled with an annual GDP increase of $2.01 billion for the first ten years and $4.16 billion annually beyond 2035.

NFIB State Director Hunter Loggins emphasized the importance of maintaining the deduction, stating: “Main Street businesses cannot afford to lose this deduction. Small businesses are dealing with rising prices, labor issues, and growing economic uncertainty. If this deduction is allowed to expire at the end of 2025, they would be faced with a big increase in taxes that would make it harder for them to operate and create jobs. This dedication has been in place since 2017, so many small businesses have never operated without it.”

According to the report, without permanent implementation of the deduction, nine out of ten small businesses could face increased tax burdens, posing risks to jobs and economic stability across the nation.