Smucker Reintroduces Main Street Tax Certainty Act

WASHINGTON - Congressman Lloyd Smucker (PA-11), a senior member of the tax-writing House Ways and Means Committee, has re-introduced the Main Street Tax Certainty Act, legislation which would permanently extend Section 199A of the Internal Revenue Code, which is slated to expire at the end of this year. Smucker's bipartisan legislation is cosponsored by 152 Members, representing two-thirds of the House Republican Conference, is supported by all Republican Members of the Ways and Means Committee, and is the most cosponsored tax bill introduced so far this session.

Section 199A, which was adopted as part of the landmark 2017 Tax Cuts and Jobs Act, allows for a 20 percent deduction of qualified income for pass-through businesses. Most small businesses are structured as a pass-through and this section was included in the Tax Cuts and Jobs Act to promote equity in America's tax code between small businesses on Main Street with larger corporations.

"When small businesses thrive, our communities thrive. Small businesses need predictability and making Section 199A permanent will provide Main Street with the certainty they need to invest in their workforce, operations, and community. This pro-growth policy will ensure small businesses maintain tax parity with larger corporations. As Congress works with the Trump administration to renew expiring provisions of the Tax Cuts and Jobs Act, I will continue to fight for Section 199A and tax policies to support small businesses and families," said Rep. Lloyd Smucker (PA-11).

"Small businesses are the driver of the American economy, employing tens of millions of our fellow citizens. The majority of new jobs in America are created by small businesses. Congress must act swiftly to extend the expiring provisions of the Trump tax cuts, including the small business deduction, to give main street America the certainty they need to invest, hire, and grow their businesses. Right now, Small Businesses are holding back needed investments because they are worried about paying a 43% tax rate next year. I applaud Rep. Smucker's leadership on the Main Street Tax Certainty Act to make the small business deduction permanent, which combined with other pro-growth tax policies will unleash our economic potential and restore the greatest economy of my lifetime that we saw during President Trump's first administration," said Ways and Means Chairman Jason Smith (MO-08).

The bill has also been introduced in the Senate by Sen. Steve Daines (R-MT)and is supported by two-thirds of the Senate Republican Conference.

The Main Street Tax Certainty Act is supported by more than 230 organizations, including the National Federation of Independent Businesses, the National Association of Manufacturers, Associated Builders and Contractors, the American Farm Bureau Federation, and the U.S. Chamber of Commerce. Click here to read a letter of support from these organizations.

"If Congress fails to act, more than 30 million small businesses will face a massive tax hike at the end of this year. The 20% Small Business Deduction allows nine out of 10 Main Street job creators to compete, grow their business, hire new employees, raise wages, and give back to their communities. NFIB is grateful for Sen. Daines and Rep. Smucker for their consistent leadership to stop the small business tax hike and urges Congress to pass the Main Street Tax Certainty Act to make the 20% Small Business Deduction permanent." - National Federation of Independent Business (NFIB) President Brad Close

"Congress must preserve the pass-through deduction to protect the small and medium manufacturers that are the backbone of the American supply chain. Manufacturers strongly support the Main Street Tax Certainty Act, which will make permanent this crucial provision and ensure that our tax code supports manufacturers in America as they invest in their businesses, create jobs, and drive the economy." - Chris Netram, Managing Vice President of Policy, National Association of Manufacturers

"Making the Section 199A deduction permanent is critical for millions of small- and family-owned businesses. The Main Street Tax Certainty Act ensures these businesses can continue to invest in their workers and communities without the threat of higher taxes. We applaud Congressman Smucker for his leadership in championing this essential legislation," said Brian Reardon, president of the S Corporation Association.

Background:

Section 199A allows up to a 20 percent pass-through income deduction for small businesses organized as sole proprietorships, partnerships, S corporations, trusts, or estates, or income from qualified REIT dividends and income from publicly traded partnerships.

A recent study from Ernst and Youngfound that 2.6 million jobs and $325 billion of the GDP are supported by the Section 199A deduction.

A 2023 study from the S Corporation Association, which represents individual and family-owned businesses, reports that tax parity between small businesses organized as pass-through entities and corporations will end if Section 199A ceases to exist.

Last year, Rep. Smucker held a roundtable with businesses from PA-11to discuss the critical importance of Section 199A.

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