The National Federation of Independent Business announced on April 15 that a new report details the economic benefits and significant tax savings resulting from the permanent status of the 20% Small Business Tax Deduction for Alaska’s small businesses.
The change is expected to affect over 77,000 small businesses in Alaska, providing them with ongoing financial relief and encouraging job growth. According to projections, if the deduction remains in place, Alaska could see an increase of about 3,000 new jobs annually over the next decade and a yearly gross domestic product boost of $175 million for ten years, rising to $360 million per year after 2035.
“This year’s Tax Day was made a little less onerous thanks to Congress making the Small Business Deduction permanent, instead of letting it expire at the end of 2025,” said Thor Stacey, state director for NFIB in Alaska. “It’s important to remind everyone that more than 80% of small businesses are organized as pass-through entities for federal tax purposes and report their business earnings and expenses on their personal income tax forms. So, it’s not an exaggeration to call making the deduction permanent a historic accomplishment. For many small businesses, it will allow them to hire more workers, give current ones a raise, buy new equipment, and, for others, a lifeline to keep their doors open.”
Since its introduction in 2017 as part of federal legislation later signed permanently into law by President Trump on July 4, 2025, this deduction has allowed eligible small businesses to deduct up to one-fifth of their business income. The measure is intended not only as direct financial support but also as a way to provide certainty against larger corporate competitors.
The National Federation of Independent Business empowers small business owners to shape policy decisions and promotes economic growth within communities according to the official website. The organization advocates for policies that foster economic growth and protect the interests of small businesses as noted on its official website. It offers support across all states including Alaska as indicated online, engages in advocacy efforts as detailed on its website, provides legislative updates and resources tailored for these enterprises according to its site, and functions broadly as an advocacy group for independent enterprises per its official site.
Looking ahead, NFIB says this legislative change will continue supporting local economies by allowing business owners greater flexibility with their finances.
