Small businesses are the lifeblood of Georgia’s economy. They create jobs, support local charities and provide essential services that keep our communities strong.
But now, these Main Street businesses face a looming crisis — one that could severely impact their ability to thrive in an already challenging environment.
In 2017, Congress passed the Tax Cuts and Jobs Act, which included a 20% tax deduction on qualified business income for small businesses. It was a bold move that allowed small businesses to better compete with their larger counterparts, invest in their operations and grow their staff.
However, while the tax cuts for large corporations were made permanent, the 20% Small Business Deduction is set to expire at the end of 2025. Without action from Congress, this could result in a major tax increase for millions of small businesses across the country.
If the deduction is allowed to expire, an estimated nine out of 10 small businesses in Georgia will face a sudden 20% increase in their taxes. Many of these businesses are already operating on thin profit margins, especially as they contend with inflation, supply chain disruptions and rising labor costs.
For some, this tax hike could be the final blow, forcing them to shut their doors for good.
Small businesses are being held back by uncertainty
Credit: National Federation of Independent Business, GA
Credit: National Federation of Independent Business, GA
A recent poll by the National Federation of Independent Business found that 93% of Americans believe Congress should make the Small Business Deduction a top priority by making it permanent. Doing so would provide the stability and predictability small business owners need to plan for the future.
Right now, uncertainty is holding them back.
The NFIB economic trends survey shows that small business optimism has finally climbed above its 50-year average after over 30 consecutive months of economic anxiety, but owners remain hesitant to hire new staff, invest in equipment or expand their operations because they don’t know what their tax bill will look like after 2025.
By making this tax relief permanent, Congress can help ease some of the financial pressure on small businesses. It would also allow them to continue playing their vital role in our local communities.
According to the U.S. Small Business Administration, small businesses make up more than 99% of all businesses in Georgia. These businesses don’t just contribute to our economy. They sponsor school events, support local nonprofits and provide stable jobs for residents.
But if small businesses are hit with a significant tax increase, the impact will ripple across our state. Jobs could be lost, charitable contributions could decline and our communities will suffer.
We cannot afford to let that happen.
Congress should make Small Business Deduction permanent
We need Georgia’s congressional delegation to set partisan politics aside and support legislation to make the Small Business Deduction a permanent part of the tax code. By doing so, they will protect local businesses, safeguard jobs and strengthen our economy for the long term.
As inflation continues to challenge business owners, the Small Business Deduction is more important than ever. Small business owners need clarity and certainty to make decisions that will keep their doors open and their employees on the payroll.
The U.S. House of Representatives has already voted to make the deduction permanent by passing the One Big Beautiful Bill Act. The U.S. Senate should quickly follow suit.
We must remind our elected officials that Main Street matters. By helping small businesses, they’ll be helping all of us.
Hunter Loggins is the Georgia state director of the National Federation of Independent Business.
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