INDIANAPOLIS (Jan. 31, 2023) – NFIB is throwing its support behind Senate Bill 2, which would provide a state and local tax, or SALT, deduction for many small businesses in Indiana. The bill is being heard today before the Senate Committee on Tax and Fiscal Policy at 9 a.m. in room 431. NFIB State Director Natalie Robinson is available today to talk about why this bill is so important for small businesses.
Robinson said “NFIB is excited to support this legislation which would provide significant tax relief to Hoosier small businesses, resulting in an estimated $50 million in annual tax savings. It would also level the playing field by allowing small businesses to qualify for tax deductions that large corporations already receive.”
Under federal law, businesses can deduct their state taxes from their federal tax liability. For most large businesses that pay income tax as corporations such as C Corps, the deduction is unlimited. However, for pass-through entities such as LLCs and S Corps where the owners pay their own individual taxes, the deduction is limited to just $10,000. Most small business owners in Indiana pay their taxes this way. Senate bill 2 would allow small business owners who pay their own individual taxes to receive an unlimited federal deduction for their state tax payments, similar to C Corps. At least 29 states have already made the change so that small business owners can enjoy the same deductions as large corporations.
Additionally, passage of SB 2 would not cost the state a penny making it a win-win for small business owners and the State of Indiana. This is especially important as NFIB small business owners are still struggling with inflation, supply issues, and worker shortages. NFIB data shows that 44% of small business owners have openings they can’t fill and 92% report that they have few or no qualified applicants.
For more information on the bill, visit iga.in.gov/legislative/2023/bills/senate/2.
The National Federation of Independent Business is the nation’s leading small business advocacy organization. To learn more about NFIB in Indiana, visit www.NFIB.com/IN.
About NFIB
For 80 years, NFIB has been the voice of small business, advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is nonprofit, nonpartisan, 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 www.NFIB.com.