139,000+ small businesses in Hawaii could face significantly higher taxes
View the report for Hawaii here. For a two-page graphic of the Hawaii numbers, click here.
News release from NFIB, April 15, 2025
HONOLULU, 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 Hawaii if made permanent.
The report also spotlights that the 139,000+ small businesses in Hawaii 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 Hawaii and the broader U.S. 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 Hawaii, the C-Corp tax rate would remain at 27.4%, while the small business rate would surge to 50.6%.
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, Hawaii is projected to gain 4,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $210 million for the first decade and $433 million per year beyond 2035.
View the report for Hawaii here. For a two-page graphic of the Hawaii numbers, click here.
“Small businesses don’t just create jobs—they create opportunity, innovation, and strong local economies,” said NFIB Hawaii State Director Michael Iosua. “If Congress allows the 20% Small Business Deduction to expire, a massive tax hike on small businesses will take effect, stifling growth, putting the brakes on hiring, and endangering countless small businesses. With the deduction set to expire this year, lawmakers must act quickly to protect small businesses and the communities they support.”
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 10 small businesses will face a significantly higher tax burden, threatening jobs and economic stability nationwide.
* * * * *
Hawaii comment on Congressional debate over making the deduction permanent
from NFIB-Hawaii
HONOLULU, April 9, 2025—A new poll released this week by the National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, shows broad, bipartisan support for America’s small businesses along with overwhelming support for keeping the 20% Small Business Tax Deduction in the tax code.
“Preventing the Small Business Deduction from expiring at the end of the year is especially important for Hawaii, where small businesses account for 99.3% of all businesses in the state and employ more than half the private-sector workforce,” said Michael Iosua, state director for NFIB in Hawaii. “Small business owners have used the deduction to create new jobs, create new benefits, buy new machinery, and expand their business. It’s vital for the health of the nation’s economy that it be made a permanent part of the tax code.”
According to the survey, more than 8 in 10 Americans feel it is important for the federal government to support small businesses, including strong majorities of Republicans, Democrats, and Independents. That support translates to strong agreement (93%) that making the 20% Small Business Tax Deduction permanent should be a top priority for Congress, with nearly all Americans (95%) expressing some concern about the impact an expiration of the deduction would have.
View the slide deck for the new poll HERE. Key findings from the nationwide poll include:
Americans overwhelmingly support small businesses.
83% of respondents said that it was important for the federal government to support small businesses. 45% believed that supporting small businesses was extremely important.
More than two-thirds of Republicans (83%), Democrats (86%) and Independents (79%) said that federal support for small businesses was important.
Nearly eight-in-ten (79%) want to see more support for small businesses.
Americans support the expiring 20% Small Business Tax Deduction that was included in the 2017 Tax Cuts and Jobs Act (TCJA).
62% of respondents want to keep the Small Business Tax Deduction in the tax code while only one in five supports letting it expire.
77% agree that the Small Business Tax Deduction helps level the playing field for small businesses by keeping their tax rates closer to those of larger corporations.
Americans believe that the 20% Small Business Tax Deduction has helped small businesses and the American economy.
91% of Americans agree that small businesses rely on the Small Business Tax Deduction.
79% of Americans believe the Small Business Tax Deduction has a positive impact on the economy overall.
75% of Americans believe the Small Business Tax Deduction has a positive impact on the local economy where they live.
51% of Americans are extremely or very concerned about the impact on the economy if the Small Business Tax Deduction expires. Nearly all Americans (95%) express some concern about the impact an expiration of the deduction would have.
The 20% Small Business Deduction was established under the 2017 Tax Cuts and Jobs Act (TCJA) to level the playing field between small businesses and their large, corporate competitors. However, this vital deduction is set to expire at the end of 2025. Without Congressional action 9 out of 10 small businesses will be hit with a massive tax hike, decimating their ability to expand business operations and raise wages for employees.
Keep up with the latest Hawaii small-business news at www.nfib.com or by following NFIB Hawaii on X @NFIB_HI.
###
LINKS:
For more than 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since its founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.
NFIB Hawaii
745 Fort Street Mall 17th Floor
Honolulu, HI 96813
808-541-9050
NFIB.com
X: @NFIB_HI