The National Federation of Independent Business (NFIB) has issued a report highlighting the advantages of maintaining the 20% Small Business Tax Deduction in Rhode Island. According to the NFIB, the continuation of this tax measure is crucial for over 109,000 small businesses in the state, who might otherwise face significant tax increases if Congress does not act to make the deduction permanent.
The report contrasts the current tax rates, noting that without the deduction, Rhode Island’s small business tax rate could rise to 45.59%, compared to the existing 28% C-Corp tax rate. The NFIB projects that if the deduction is kept, Rhode Island could see an annual increase of 5,000 jobs over the next decade, with a GDP boost of $250 million annually for the first ten years, and $515 million per year after 2035.
Christopher Carlozzi, NFIB Rhode Island State Director, emphasized the importance of supporting small businesses, stating: “Small businesses don’t just create jobs—they create opportunity, innovation, and strong Rhode Island communities.” Carlozzi warned that failing to renew the deduction would result in a “massive tax hike,” consequently harming growth, job creation, and the sustainability of countless small businesses.
NFIB underscores that the 20% Small Business Tax Deduction, introduced as part of the Tax Cuts and Jobs Act of 2017, has been instrumental in allowing small businesses to expand, hire, and raise wages. The organization cautions that without legislative action to make it permanent, a large proportion of small businesses nationwide would face heightened tax burdens, posing threats to jobs and economic health.
For further insights and to view the complete Rhode Island report, interested parties are directed to NFIB’s website and referenced report.
NFIB has been advocating for small and independent businesses for eight decades, operating as a nonprofit and nonpartisan entity since its founding in 1943. More details on NFIB’s activities can be found at nfib.com.
