More than 100 business groups have come out in support of new legislation to make permanent the 20% qualified business income (QBI) deduction for pass-through entities (PTEs), according to a release from the S Corp Association. IRC Code Section 199a allows a 20% write-off of QBI for certain sole proprietors, owners of S corporations, and members of partnerships/LLCs. Introduced by Senator Steve Daines (Montana), the “Main Street Certainty Act of 2019”—S. 1149—is the companion bill to H.R. 216, bipartisan legislation introduced by Representatives Jason Smith (Missouri) and Henry Cuellar (Texas) in the House of Representatives.

The QBI deduction in the Tax Cuts and Jobs Act affects businesses’ cash flow, operations, and long-term strategy, which impact valuations of businesses that range from mom-and-pop stores to private equity investors. While the new tax law provided permanent tax relief to corporations, which saw their tax rate slashed from 35% to 21% and an end to U.S. taxes on much of their foreign profits, PTE owners got only temporary relief under the law’s individual tax provisions, which are due to expire after 2025.