WASHINGTON, D.C. – Senator John Kennedy (R-La.) and Senator Steve Daines (R-Mont.) have introduced the Main Street Tax Certainty Act, aimed at permanently extending critical tax deductions for small businesses established under the Tax Cuts and Jobs Act (TCJA). These deductions, set to expire on December 31, 2025, provide significant tax relief to pass-through businesses, which represent the backbone of the U.S. economy.
“More than 230,000 small businesses in Louisiana could face tax hikes if these deductions expire,” said Kennedy. “The Main Street Tax Certainty Act will ensure that small businesses continue to provide good-paying jobs to our communities without the burden of increased taxes.”
Senator Daines highlighted the importance of the legislation for his state. “As the son of a contractor, I’ve seen the hard work it takes to keep a small business running. Passing this bill is crucial to prevent a 20% tax increase and support small businesses that are the majority job providers in Montana.”
Key Provisions of the Main Street Tax Certainty Act
- Permanently extends the 20% tax deduction for qualified business income of pass-through entities such as sole proprietorships, S-corporations, partnerships, and limited liability companies.
- Protects small businesses from being taxed at corporate rates by preserving the deduction for individual income tax filings.
- Helps maintain the economic momentum created by the TCJA, which has been instrumental in job creation and economic growth since its passage in 2017.
Background on Section 199A Deductions
The TCJA introduced Section 199A to provide tax relief to pass-through businesses. These entities account for a significant portion of U.S. businesses and include a diverse range of industries such as retail, construction, and professional services. Without Congressional action, the deductions will sunset at the end of 2025, resulting in a 20% tax hike for millions of small business owners.
Broad Bipartisan Support
The legislation has garnered the backing of numerous senators, including Sens. Bill Cassidy (R-La.), John Thune (R-S.D.), Shelley Moore Capito (R-W.Va.), and Joni Ernst (R-Iowa). In total, more than 30 senators have signed on as cosponsors, emphasizing the bipartisan recognition of the deduction’s importance to small businesses.
Economic Impact
Small businesses employ nearly half of the U.S. workforce and are critical to local economies. The continuation of Section 199A deductions would safeguard these enterprises against financial strain and help them navigate challenges such as inflation and rising costs.
“Pass-through businesses are the lifeblood of our economy,” Kennedy added. “This legislation ensures that these businesses remain competitive and capable of driving growth, innovation, and prosperity.”
Next Steps
The Main Street Tax Certainty Act will now move through the legislative process, with proponents urging swift action to provide clarity and stability for America’s small business community.
For more information, visit Kennedy’s official website.