- The permanent 20% small business tax deduction aids Utah's 371,000-plus small businesses.
- Nine out of 10 Utah small businesses will avoid a 44.25% tax rate through the deduction.
- Utah could gain 16,000 jobs annually and boost GDP by $816 million.
SALT LAKE CITY — The passage of the One Big Beautiful Bill Act in July 2025 came with a big benefit for small businesses around the nation by making permanent the Qualified Business Income deduction.
Put simply, the deduction allows eligible taxpayers — in this case, small businesses organized as pass-through entities — to deduct up to 20% of their business income from federal and state taxes.
For the 371,000-plus small businesses that call Utah home, the passage is a welcome move.
"This year's tax day is a good time to once again thank Utah's congressional delegation for their work in making the Small Business Deduction permanent, instead of letting it expire at the end of last year," Casey Hill, state director for the National Federation of Independent Business in Utah, said in a statement.
The deduction means nine out of 10 small businesses in Utah can avoid a 44.25% tax rate, freeing resources to further invest in the business, employees and the communities these businesses serve, according to data from the National Federation of Independent Business.
Additionally, the data shows Utah is projected to gain 16,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $816 million for the first decade and $1.7 billion per year beyond 2035.
"To call it a historic accomplishment is not an overstatement. More than 80% of small businesses are organized as pass-through entities for federal tax purposes and report their business earnings and expenses on their personal income tax forms," Hill said in a statement.
Hill also praised the Utah Legislature for passing SB60, which cut the state's corporate and income tax rate from 4.5% to 4.45%.
"Thanks to the – now – permanency of the Small Business Deduction, combined with the Utah Legislature's passing, and Gov. Spencer Cox's signing of Senate Bill 60, small business owners have clearer certainty to decide on whether to hire more workers, give raises to current employees, or buy new equipment. For other Main Street entrepreneurs, it's a lifeline to remain solvent long enough to turn their businesses back in the direction of profitability," Hill added.
