PIA Supports Introduction of Bill to Make Small Business Tax Deduction PermanentMarch 6, 2021
WASHINGTON – The National Association of Professional Insurance Agents (PIA) today applauded Reps. Jason Smith (R-MO) and Henry Cuellar (D-TX) and Senator Steve Daines (R-MT) for introducing the “Main Street Tax Certainty Act of 2021,” (H.R. 1381/S.480) which would make permanent the 20 percent tax deduction currently available to some passthrough entities.
PIA successfully advocated for the passage of the tax bill signed into law at the end of 2017 (Public Law No. 115-97) because it provided subchapter S corporations, also known as “passthrough” corporations, with more favorable tax treatment. The law includes a tax deduction for owners of small businesses, reducing the potential tax burden on insurance agencies that organize as passthroughs. Many PIA members own independent insurance agencies that are organized as S corporations.
But, unlike the permanent tax relief provided by the law to entities organized as C corporations, the 2017 passthrough deduction was designed to be temporary. As a result, the benefit for eligible PIA members will end on December 31, 2025. The provision’s scheduled sunset deprives small business owners of certainty regarding their future tax liability and leaves them unable to rely on the ongoing availability of this deduction. The Main Street Tax Certainty Act of 2021 will resolve this uncertainty for eligible passthrough corporations by ensuring that they receive this tax deduction permanently.
“Small businesses have been devastated due to the economic impact of COVID-19, which had not been felt when the passthrough deduction was passed. As the economic effects of the virus recede, and businesses reopen, Congress must ensure this crucial tax deduction remains available to eligible small businesses,” said Jon Gentile, PIA vice president of government relations. “For PIA, passage of this legislation is a top priority as Congress considers how to support small businesses in the current economic environment and provide certainty going forward.”
Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses.