U.S. Rep. Lloyd Smucker (R-PA) recently introduced bipartisan legislation that would permanently extend Section 199A of the Internal Revenue Code.
Section 199A, which was adopted as part of the 2017 Tax Cuts and Jobs Act, is set to expire in 2025. It allows for up to a 20 percent pass-through income deduction for small businesses organized as sole proprietorships, partnerships, S corporations, trusts, or estates. It also applies to income from qualified REIT dividends and income from publicly traded partnerships.
Most small business are structured as a pass-through.
The purpose of Section 199A was to promote equity between small businesses and larger corporations.
The Main Street Tax Certainty Act has the support of the Republican members of the Ways and Means Committee and has nearly 100 cosponsors.
In the U.S. Senate, Sen. Steve Daines (R-MT) introduced companion legislation with 18 cosponsors.
The bill has the support of numerous business organizations in Smucker’s Congressional district including the Pennsylvania Chamber, the Lancaster Chamber of Commerce, the York County Economic Alliance, the Hanover Area Chamber of Commerce, the Building Industry Association of Lancaster County, the Pennsylvania Food Merchants Association, the Pennsylvania Motor Truck Association, the Pennsylvania Farm Bureau, the Pennsylvania Restaurant. & Lodging Association, and the REALTORS Association of York & Adams Counties.
“The Main Street Tax Certainty Act would help support millions of American small- and individually owned businesses during a critical time in our economic recovery,” Luke Bernstein, PA Chamber president and CEO, said. “These companies are the backbone of our economy, employing the vast majority of private-sector workers. The passage of the Main Street Tax Certainty Act will foster economic growth and help Pennsylvania’s small businesses, S-corporations, and sole proprietorships remain competitive while overcoming the long-term financial impacts of the pandemic.”
“When it comes to the nation’s business climate, predictability is one of the chief concerns for any company,” Alex Baloga, Pennsylvania Food Merchants Association, president and CEO said. “By making permanent Section 199A, Congressman Smucker’s Main Street Tax Certainty Act will let small businesses continue to count on equitable treatment under the tax code. Many smaller food retailers, wholesalers, and distributors throughout Pennsylvania are owned by individuals or families. Despite unprecedented challenges and often the smallest of margins, they work hard every day to ensure their neighbors and communities have healthy, nutritious options. Each one stands to benefit from Congressman Smucker’s legislation, and the reassurance of knowing a tax increase set to hit them at the end of 2025 will be averted.”
“Amidst the various challenges faced by small businesses in the hospitality and lodging industries, from labor shortages to escalating costs, Congressman Smucker’s Main Street Tax Certainty Act is the support the industry needs,” Joe Massaro, Pennsylvania Restaurant & Lodging Association president and CEO, said. “Many of Pennsylvania’s hospitality and tourism attractions, like bed & breakfasts, are small businesses. Seven in ten restaurants are single-unit operations and nine in ten have fewer than 50 employees. Additionally, 41 percent of restaurants are minority owned. This crucial legislation cements its commitment to Pennsylvania’s defining small businesses.”