Last Frontier News

In Juneau, Alaska, research indicates that the state's economy would gain from an extension of the federal 20% Small Business Deduction, currently facing expiration at the close of 2025. Recent studies, including the 2024 NFIB Tax Survey and a report collaboratively produced with Ernst & Young, highlight the economic advantages of maintaining this aspect of the 2017 Tax Cuts and Jobs Act.

Ernst & Young have estimated that, “The tax change is estimated to increase US job equivalents at small businesses by approximately 1.2 million jobs, on average, in each of the first ten years and growing over time to 2.4 million each year after that.” Further economic impact on the GDP was noted: “Permanently extending the Section 199A deduction is estimated to increase US GDP at small business by $75 billion annually, over the first 10 years; and growing over time to $150 billion annually each year thereafter.”

Specifically, Alaska would see an increase of 3,000 jobs and an additional $175 million in GDP each year for the initial decade, with expectations of 5,000 jobs and $360 million annually after 2035.

The NFIB Tax Survey also revealed potential responses from businesses if the deduction expires. Notably, 61% would raise prices, 44% would delay or cancel capital investments, and 36% would defer or cancel hiring plans, among other reactions.

Jeff Brabant, vice president of Federal Government Relations at the NFIB, addressed the Senate Committee on Finance last Thursday. Brabant emphasized, “Members of Congress should ask themselves if they really believe it when they say, ‘small businesses are the backbone of America.’ If they truly believe that statement and value small businesses in their communities, then making the 20% small business deduction permanent should be an easy decision.”

The typical NFIB member employs a small staff of one to nine people, with average gross sales around $500,000 annually. More updates and reports related to small-business economic trends and job statistics can be accessed through NFIB's platforms.

NFIB, a nonprofit organization, has been advocating for small and independent business interests for 80 years across the United States, remaining steadfast in this mission since its inception in 1943.

For additional information on small-business developments in Alaska, visit www.nfib.com/alaska or follow updates on X at @NFIB_AK.