WASHINGTON, D.C. (April 15, 2025) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, released new state-specific reports outlining the benefits the 20% Small Business Tax deduction will bring to every state in the country if it is made permanent. The reports also spotlight the massive tax increases small businesses in each state will face if the deduction is not made permanent.

View the state-specific reports here.

“Small businesses don’t just create jobs—they create opportunity, innovation, and strong local economies,” said NFIB President Brad Close. “If Congress allows the 20% Small Business Deduction to expire, a massive tax hike on small businesses will take effect, stifling growth, putting the brakes on hiring, and endangering countless small businesses. With the deduction set to expire this year, lawmakers must act quickly to protect small businesses and the communities they support.”

The expiration of the deduction would also create an uneven playing field between small businesses and large corporations. Without Congressional action, many small businesses will face significantly higher tax rates than their larger, C-corporation counterparts, making it harder for them to compete, grow, and reinvest in their businesses. In some states, small business owners could see their tax rates climb dramatically, with small business owners in some cases paying nearly twice the tax rate of their larger competitors. For example, in Hawaii, small businesses could be hit with a staggering 50.6% tax rate, while big corporations continue paying just 27.4%. That’s a gap of more than 23 percentage points, making it even harder for local entrepreneurs to compete.

Each state’s report includes:

• The number of small businesses that would be hit with higher taxes if the deduction is not made permanent
• The projected increase in state jobs and economic growth if the deduction is made permanent
• The anticipated impact of the 20% Small Business Deduction on the U.S. economy, including GDP growth and job creation, if it is made permanent

Small businesses are the backbone of the U.S. economy, driving job creation and local investment. The 20% Small Business Tax Deduction has empowered millions of small business owners to expand, hire employees, and increase wages. If Congress does not act to make the provision permanent this year, nine out of 10 small businesses will face a significantly increased tax burden, threatening jobs and economic stability nationwide.

For more information about NFIB’s advocacy efforts and to access the state-specific reports, click here.