HR 110 — Small Business Prosperity Act of 2025

Bill Text

• Introduced Introduced in House Current html January 03, 2025

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The bill significantly enhances tax deductions for qualified business income, repeals estate tax, and clarifies the treatment of corporate reorganizations under the Internal Revenue Code.

• Section 199A

  subsection (i)

  Makes the deduction for qualified business income permanent.

• Section 199A(a)(2)

  20 percent → 43 percent (47 percent in the case of any taxable year beginning after December 31, 2025)

  Increases the deduction rate on qualified business income to up to 47% in future years.

• Section 199A(b)(2)

  (2) Determination of deductible amount for each trade or business.--The amount determined under this paragraph with respect to any qualified trade or business is 43 percent (47 percent in the case of any taxable year beginning after December 31, 2025) of the taxpayer's qualified business income with respect to the qualified trade or business.

  Redefines how the deductible amount is calculated for each trade or business.

• Section 199A(d)

  (d) Qualified Trade or Business.--For purposes of this section, the term `qualified trade or business' means any trade or business other than the trade or business of performing services as an employee.

  Expands the definition of a qualified trade or business.

• Section 199A(b)

  paragraphs (3), (4), and (6)

  Removes certain limitations and conditions that may have restricted deductions.

• Section 199A(b)(4)

  the lesser of-- → 9 percent of so much of the qualified business income with respect to such trade or business as is properly allocable to qualified payments received from such cooperative

  Changes the calculation basis for specific deductions.

• Section 199A(e)

  paragraph (2)

  Removes a specific provision limiting deductions.

• Section 199A(f)(1)

  (1) Application to partnerships and s corporations.--(A) In general.--In the case of a partnership or S corporation--(i) this section shall be applied at the partner or shareholder level, and (ii) each partner or shareholder shall take into account such person's allocable share of each qualified item of income, gain, deduction, and loss. For purposes of this subparagraph, in the case of an S corporation, an allocable share shall be the shareholder's pro rata share of an item.

  Clarifies how partnerships and S corporations apply the new provisions.

• Section 199A(f)(4)(A)

  and wages

  Eliminates specific references limiting deduction calculations.

• Section 199A(g)(1)

  subparagraph (B)

  Removes one provision and redesignates another, streamlining the section.

• Section 199A

  subsection (h)

  Removes additional limitations or provisions affecting qualified business income.

• Notwithstanding any provision of the Internal Revenue Code of 1986, a change in the organizational structure of a corporation, however organized, into another organizational structure is not a taxable event for the purposes of such Code if there is no change among the owners, their ownership interests, or the assets of the organization (other than a de minimis change in such assets).

  Establishes that corporate reorganizations without changes in ownership are not taxable events.

• Chapter 11

  Effective for estates of decedents dying after December 31, 2024, chapter 11 of the Internal Revenue Code of 1986 is repealed.

  Abolishes the estate tax for estates of decedents dying after a specified date.

Action History

1. January 03, 2025

   Introduced in House

2. January 03, 2025

   Introduced in House

3. January 03, 2025

   Referred to the House Committee on Ways and Means.

Sponsors

• Andy Biggs · Primary

Subjects