Amid ongoing discussions about the future of President Trump’s tax cuts, U.S. Senator Steve Daines (R-Mont.), alongside Senate Majority Leader John Thune (R-S.D.) and 33 other Republican senators, introduced the “Main Street Tax Certainty Act,” a bill aimed at making the 20 percent pass-through business tax deduction permanent. Without congressional action, the deduction is set to expire at the end of 2025, potentially resulting in a significant tax increase for small businesses across the country.
Daines emphasized the importance of the bill, citing the struggles small businesses face amid economic challenges.
“As the son of a contractor, I’ve seen firsthand the hard work it takes to keep a small business flourishing—especially as Americans are still grappling with the effects of Joe Biden’s inflation,” said Daines. “It’s absolutely crucial that we pass this legislation to prevent a 20 percent tax increase for hardworking Montanans, and I’ll keep fighting for ways to support Montana small businesses, which provide the majority of jobs in our state.”
Thune echoed Daines’ sentiments, stressing the economic impact of small businesses.
“Small businesses are the economic engine that drive growth and jobs in South Dakota and across our country,” said Thune. “This legislation is critical to permanently extending a key provision from the Tax Cuts and Jobs Act and ensuring our small businesses, farms, and ranches are not hit with a crippling tax hike at the end of 2025.”
The bill, backed by a coalition of Republican senators, including John Barrasso (R-Wyo.), Joni Ernst (R-Iowa), Ted Cruz (R-Texas), and Rick Scott (R-Fla.), seeks to provide long-term certainty for small business owners who rely on the deduction to grow their businesses and support job creation.
The 20 percent small business deduction, known as Section 199A, was established under the 2017 Tax Cuts and Jobs Act to level the playing field between small businesses and large corporations. According to a recent study by Ernst and Young, the deduction supports 2.6 million jobs and contributes $325 billion to the U.S. GDP. Without legislative action, 9 out of 10 small businesses could see a significant tax hike when the provision expires.
Industry leaders have voiced strong support for the bill.
“Congress must preserve the pass-through deduction to protect the small and medium manufacturers that are the backbone of the American supply chain,” said Chris Netram, Managing Vice President of Policy at the National Association of Manufacturers.
Brad Close, President of the National Federation of Independent Business (NFIB), warned of severe consequences if Congress fails to act.
“If Congress fails to act, more than 30 million small businesses will face a massive tax hike at the end of this year,” Close said. “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.”
The bill has received widespread backing, with over 230 trade associations signing a letter in support of the “Main Street Tax Certainty Act.”
Montana Retail Association President Brad Griffin highlighted the importance of the tax deduction for businesses in the hospitality and retail sectors.
“Over the past five years, food prices have increased by 35%, and the family-owned businesses that operate Montana restaurants and hotels are facing higher costs for labor and maintenance,” said Griffin. “If the pass-through tax deduction expires, a growing part of our local economy will be severely strained.”
As discussions continue, Daines and his Republican colleagues are urging swift congressional action to provide certainty and relief for millions of small business owners nationwide.