The National Federation of Independent Business announced on Apr. 15 a new report detailing the economic impact and tax savings resulting from the permanent 20% Small Business Tax Deduction for Maryland’s small businesses. The report outlines that this change will benefit nearly 696,710 small businesses in the state and describes additional federal tax relief measures recently signed into law.
According to the NFIB, making this deduction permanent is expected to have a significant effect on Maryland’s economy. Projections show that maintaining the deduction could lead to an increase of about 24,000 new jobs annually over the next decade and raise annual gross domestic product by $1.5 billion for ten years, with growth reaching $3 billion per year after 2035.
Mike O’Halloran, NFIB Maryland State Director, said, “Small businesses tend to pay more in taxes than their large corporate competitors, but the 20% Small Business Deduction allows them to keep more of their hard-earned money and decide how to reinvest it back into their business.” O’Halloran also addressed concerns among business owners regarding possible future state-level tax increases: “While making the Small Business Deduction gives Maryland small business owners federal tax certainty, owners are concerned that local lawmakers will enact yet another state tax increase on them next year. Main Street businesses urge the General Assembly to avoid a tax hike next legislative session.”
Since its introduction in 2017, the Small Business Tax Deduction has allowed eligible businesses to deduct up to one-fifth of their income from taxation. This provision was set to expire at the end of 2025 until Congress passed legislation extending it permanently—a measure signed by President Trump on July 4, 2025.
The National Federation of Independent Business – Maryland functions as a state branch dedicated to advocating for small business interests according to its official website. The organization tracks legislation affecting small enterprises and opposes policies such as increased taxes while promoting supportive measures as reported by its official website. O’Halloran serves as state director for NFIB-Maryland according to its official website.
Operating within Maryland and focusing on issues relevant at both local and state levels according to its official website, NFIB-Maryland influences policy through legislative tracking and advancing pro-small business positions in Annapolis as stated by its official website. The group also provides resources about legislative matters impacting small companies according to its official website.
With these changes now enacted into law at both federal and state levels, many observers expect continued debate over future local taxation policies affecting small businesses.
