Texas Border Business
AUSTIN – The National Federation of Independent Business released a report detailing the economic effects of making the 20 percent Small Business Tax Deduction permanent, including projected tax savings and growth for Texas businesses.
The report states that Texas has 3.5 million small businesses that will benefit from the policy, along with other federal tax relief measures recently signed into law. NFIB projects the state could gain about 104,000 new jobs each year over the next ten years if the deduction remains in place. It also estimates an annual increase in gross domestic product of $6 billion during the first decade, rising to $12.5 billion per year after 2035.
“Small businesses commonly pay a larger share of taxes compared to their big box store competitors, but the 20% Small Business Deduction allows them to keep more of their hard-earned money and decide how to reinvest it back into their business,” said Jeff Burdett, state director for NFIB in Texas. He added that making the deduction permanent “replaced the threat of a massive tax hike with long-term tax certainty” and called it “a historic accomplishment” for small businesses and local communities.
The deduction was first introduced in 2017 and allows eligible small businesses to deduct up to 20 percent of their qualified business income. NFIB said the policy has supported hiring, investment, and business expansion. Without action from Congress, the deduction was scheduled to expire at the end of 2025.
After passage by Congress, Donald Trump signed legislation on July 4, 2025, making the deduction permanent. NFIB states that the change allows small businesses to retain more income and provides long-term certainty as they plan operations and compete with larger companies.
For more information about NFIB’s advocacy efforts and to access Texas’s report, CLICK HERE.
