The National Federation of Independent Business announced on Apr. 15 that a new report highlights the economic impact of making the 20% Small Business Tax Deduction permanent for North Carolina’s small businesses. The organization said this change will benefit about 1.1 million small businesses in the state and outlines other recent federal tax relief measures.
According to the NFIB, keeping the deduction in place is projected to result in an additional 373,000 jobs annually over the next decade and could increase North Carolina’s gross domestic product by $1.8 billion each year during that period, with annual gains rising to $3.8 billion beyond 2035.
Gregg Thompson, NFIB State Director, said, “The 20% Small Business Deduction has helped level the playing field between Main Street businesses and their larger, corporate competitors.” Thompson added, “By making the deduction permanent, Washington has provided a greater sense of certainty for small businesses, making it easier for them to plan ahead and grow their businesses.”
Since its introduction in 2017, the Small Business Tax Deduction has allowed eligible businesses to deduct up to one-fifth of their income from taxes. This policy was set to expire at the end of 2025 without further action by Congress.
Legislation passed by Congress and signed into law by President Trump on July 4, 2025 made this deduction permanent. The NFIB says this move allows small business owners to retain more earnings for investment in their companies and employees rather than paying higher taxes.
