DES MOINES, IOWA (April 15, 2025) — The National Federation of Independent Business (NFIB), the nation’s leading small-business-advocacy organization, released a new report outlining the benefits the 20% Small Business Tax Deduction will bring to Iowa if made permanent. The report also spotlights that the 282,000+ small businesses in Iowa could face significantly higher taxes if Congress does not make the 20% Small Business Tax Deduction permanent this year. The report outlines the severe consequences for small businesses in Iowa and the broader US economy that would result from the provision’s expiration, highlighting potential economic slowdown and increased financial strain on local businesses.
The report also highlights a stark contrast in tax rates between small businesses and their larger corporate competitors if the deduction is not made permanent. In Iowa, the C-Corp tax rate would remain at 28.1% while the small-business rate would surge to 43.4%.
However, making the deduction permanent would lead to significant economic benefits, leaving the small-business tax-rate on a level playing field with its competitors. Additionally, Iowa is projected to gain 12,000 new jobs annually over the next ten years if the deduction remains in place, including an annual GDP increase of $562 million for the first decade and $1.16 billion per year beyond 2035.
View the report for Iowa here.
“Iowa’s small businesses contribute a great deal to our communities and our state as a whole,” said NFIB Iowa State Director Matt Everson. “Congress must not let the 20% Small Business Deduction expire. A massive tax hike on small businesses will hinder growth and hiring. Capitol Hill must act quickly to protect small businesses and make the small business tax deduction permanent.”
The 20% Small Business Tax Deduction, a key provision of the Tax Cuts and Jobs Act of 2017, has empowered millions of small-business owners to expand, hire employees, and increase wages. If Congress does not act to make it permanent this year, nine out of ten small businesses will face a significantly higher tax burden, threatening jobs and economic stability nationwide.
For more information about NFIB’s advocacy efforts and to access Iowa’s report visit: nfib.com/wp-content/uploads/2025/04/NFIB-20-Small-Business-Deduction-Impact-IA.pdf.
For eighty years, NFIB has been advocating on behalf of America’s small and independent business-owners, both in Washington DC and in all fifty state capitals. NFIB is non-profit, non-partisan, and member-driven. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses, and remains so today. For more information, please visit nfib.com.
