The National Federation of Independent Business (NFIB) has released a report detailing the economic windfall for Nevada following the permanent extension of the 20% Small Business Tax Deduction. Technically known as Section 199A, this provision originated as a cornerstone of the 2017 Tax Cuts and Jobs Act signed by President Trump to level the playing field for “pass-through” businesses—like LLCs and sole proprietorships—that report income on personal tax forms.
By allowing owners to deduct a fifth of their earnings, the policy ensures local shops aren’t taxed at significantly higher rates than large corporations.
While the deduction was initially temporary, President Trump signed legislation on July 4, 2025, to make it permanent and avert a looming “tax cliff”. This move stopped a massive federal tax hike for nine out of 10 small businesses in Nevada, who would have otherwise faced a 39.6% federal individual tax rate.
For the state’s 353,621 small businesses, this permanency provides the financial predictability needed to hire more workers and invest back into their communities.
A Billion-Dollar Boost for Nevada
The NFIB’s data suggests that making the deduction permanent serves as a massive engine for the state’s economy. According to the report’s projections:
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Job Creation: Nevada is expected to gain 12,000 new jobs annually over the next decade. This is projected to double to 24,000 jobs per year beyond 2035.
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State GDP Growth: Nevada’s Gross Domestic Product is projected to increase by $659 million per year for the first ten years.
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Long-term Impact: After 2035, the annual GDP boost is expected to soar to $1.4 billion.
The impact extends nationally, with the U.S. economy projected to see an annual GDP increase of $75 billion and the creation of 1.2 million jobs each year for the first decade.
A Comprehensive Suite of Tax Wins
The 20% Small Business Tax Deduction allows pass-through entities to deduct up to 20% of their business income. This prevents nine out of 10 Nevada small businesses from facing a top federal individual tax rate of 39.6%.
The NFIB report also highlights other permanent federal tax relief wins:
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Small Business Expensing: The Section 179 expensing cap was doubled to $2.5 million, allowing businesses to deduct the full price of equipment in the year acquired.
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100% Bonus Depreciation: This deduction was permanently restored, allowing for the full deduction of qualified property in its first year of service.
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Estate Tax Relief: Exemption levels were permanently increased to $15 million for individuals and $30 million for joint filers, ensuring businesses are not forced into liquidation to pay the tax.
Reinvesting in the Community
By providing small business owners with the certainty needed for long-term decisions, these measures allow them to keep more revenue to hire workers, increase wages, or upgrade equipment.
As Nevada continues to grow, its 353,621 small businesses and their 578,767 employees remain the foundation of the state’s economy.
Ultimately, this isn’t just about a line item on a tax return—it’s about the long-term health of our local economy here in the Silver State. For the hundreds of thousands of small business owners across the state, this means the “tax cliff” is officially behind them, replaced by the kind of stability they need to keep hiring, growing, and supporting our communities.
Read the full report here: NV-Small-Business-Deduction-Impact-Sheet-1
The opinions expressed by contributors are their own and do not necessarily represent the views of Nevada News & Views. This article was written with the assistance of AI. Please verify information and consult additional sources as needed.
