Old Dominion News

NFIB State Director Julia Hammond has raised concerns about the potential expiration of a crucial tax deduction for small businesses in Virginia. In an article for The Virginian-Pilot, Hammond emphasized the need for Congress to make the 20% small business deduction permanent, as it is set to expire in 2025.

The 2017 legislation that introduced this deduction provided a significant tax break for small businesses by allowing them to deduct up to 20% of their qualified business income from federal taxes. However, unlike Wall Street's permanent tax breaks, this benefit was temporary and will require congressional action to continue beyond its expiration date.

Hammond pointed out that without the Main Street Tax Certainty Act, many small businesses in Virginia could face a sudden 20% tax increase. This comes at a time when inflation is already impacting costs related to raw materials and wages, potentially threatening the survival of some businesses on Main Street.

Small business owners are urging their representatives in Congress to support the bipartisan Main Street Tax Certainty Act. According to Hammond, "Small business owners need stability," and current conditions create uncertainty that hampers investment and growth opportunities.

Despite bipartisan support for the act on Capitol Hill, only four out of eleven U.S. representatives from Virginia—Ben Cline, Bob Good, Jennifer Kiggans, and Robert Wittman—have signed on as cosponsors. Neither of Virginia's U.S. senators has shown support yet.

Virginia's economy heavily relies on its small businesses, which constitute 99.5% of all businesses in the state according to the U.S. Small Business Administration. These enterprises not only provide jobs but also contribute significantly through local sponsorships and unique goods and services.

Hammond stressed that with thin profit margins already squeezed by inflation, a substantial tax hike could force some businesses to close permanently: "We can’t afford to lose our small businesses."

The call is clear: Virginia’s entire congressional delegation needs to act decisively by supporting legislation that would make this vital deduction permanent.