Qualified Business Income Deduction

One way the Ways and Means Committee Tax Teams have been preparing for next year is by traveling the country listening to business owners and families about how Congress can improve upon the success of the Tax Cuts and Jobs Act. One thing that comes across in all conversations is the need to preserve the Qualified Business Income Deduction, also known as 199A. This deduction is primarily used by small businesses to deduct up to 20% of their qualified business income, plus 20% of qualified real estate investment trust dividends and qualified publicly traded partnership income. Unfortunately, this tax provision expires in 2025.

This tax policy has been vital for small businesses, giving them a tax rate that is competitive with the Corporate Rate that larger C-corps pay. Many of these small businesses are the lifeblood of rural communities across my district. It has been a difficult economic climate for so many of these vital local businesses, we need to ensure that they have a tax policy that will help them compete and grow.

I am a proud cosponsor of the Main Street Tax Certainty Act, which would make the 199A deduction permanent, giving our Main Street businesses the certainty they need to succeed.

PROVE IT Act Passes in the House

Earlier this year, I cosponsored the Prove It Act, which enables businesses to raise concerns when regulators do not account for the full impact of their regulations by reinforcing the Regulatory Flexibility Act, which was intended to require federal agencies to analyze the impacts of their regulatory actions. Currently, this law is not clearly defined, which has given agencies too much wiggle room and allowed them to operate at their own discretion rather than in the interest of small business. Under this legislation, if regulators fail to comply with this process, the small business will be exempt from the agency's regulations.

I am a firm believe that the government should work for the people of this country, and this legislation gives the people a clear way to hold the government accountable to that responsibility.

I was proud to VOTE YES this week when the PROVE IT Act passed on the House floor.

Reducing Regulatory Burdens for Small Businesses

Constituents across the 7th District have reached out to me with their concerns regarding new reporting requirements. For example, the Corporate Transparency Act implemented the Financial Crimes Enforcement Network (FinCEN) beneficial ownership reporting, which is a new reporting requirement for small businesses (qualified as businesses with under twenty employees and less that $5 million in sales). This new requirement went into effect in January of this year and yet, according to a National Federation of Independent Businesses (NFIB) survey, 80% of NFIB members had never heard of the new reporting requirement.

This new requirement shifts the burden from financial institutions to the small businesses, which would be required to continuously monitor and provide private information of their beneficial owners, board members, senior management, and legal representation. Failure to comply can carry sizeable criminal and civil penalties like fines and even imprisonment. 

I cosponsored the Protect Small Businesses from Excessive Paperwork Act to provide relief for small businesses by prescribing a one-year extension for beneficial ownership reporting requirements. This will give our small businesses a fighting chance to meet these new requirements without penalty. I have also cosponsored the Repealing Big Brother Act, which would repeal this reporting altogether. The federal government should exist to help Americans grow and prosper, not bog them down with unnecessary regulations.

Hero of Main Street Award

This week, I was honored to be presented with the National Retail Federation's Hero of Main Street Award. This award is given to lawmakers that are committed to "advancing public policy that encourages a vibrant, sustained and healthy retail sector."  

Retail accounts for more than a quarter of jobs in America, and the vast majority of retailers are small businesses with fewer than 50 employees. I am honored for this recognition and look forward to continuing advocating for legislation that bolsters the retail economy across western Minnesota and the country.

Thank you for reading!

fischbach.house.gov

Unsubscribe