NFIB News:
SANTA FE —The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, released a new report outlining the benefits the 20% Small Business Tax Deduction will bring to New Mexico if made permanent.
The report also spotlights that the 166,000+ small businesses in New Mexico could face significantly higher taxes if Congress does not make the 20% Small Business Tax Deduction permanent this year. The report outlines the severe consequences for small businesses in New Mexico and the broader U.S. economy that would result from the provision’s expiration, highlighting potential economic slowdown and increased financial strain on local businesses.
The report also highlights a stark contrast in tax rates between small businesses and their larger corporate competitors if the deduction is not made permanent. In New Mexico, the C-Corp tax rate would remain at 26.9%, while the small business rate would surge to 45.5%.
However, making the deduction permanent would lead to significant economic benefits, leaving the small business tax rate on a level playing field with its competitors. Additionally, New Mexico is projected to gain 7,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $308 million for the first decade and $636 million per year beyond 2035.
View the report for New Mexico here. For a two-page graphic of the New Mexico numbers, click here.
“It was a huge relief when four proposals adding more costs and compliance onto the backs of small business owners in New Mexico were defeated in the Legislature,” NFIB New Mexico State Director Jason Espinoza said. “Now, Congress needs to add to that relief by not letting the 20% Small Business Deduction expire at the end of the year.”
The 20% Small Business Tax Deduction, a key provision of the Tax Cuts and Jobs Act of 2017, has empowered millions of small business owners to expand, hire employees, and increase wages. If Congress does not act to make it permanent this year, nine out of 10 small businesses will face a significantly higher tax burden, threatening jobs and economic stability nationwide.
Keep up with the latest New Mexico small-business news at www.nfib.com.
