139,000+ small businesses in Hawaii could face significantly higher taxes
View the report for Hawaii here. For a two-page graphic of the Hawaii numbers, click here.
News release from NFIB, April 15, 2025
HONOLULU, April 15, 2025—The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, released a new report outlining the benefits the 20% Small Business Tax Deduction will bring to Hawaii if made permanent.
The report also spotlights that the 139,000+ small businesses in Hawaii could face significantly higher taxes if Congress does not make the 20% Small Business Tax Deduction permanent this year. The report outlines the severe consequences for small businesses in Hawaii and the broader U.S. economy that would result from the provision’s expiration, highlighting potential economic slowdown and increased financial strain on local businesses.
The report also highlights a stark contrast in tax rates between small businesses and their larger corporate competitors if the deduction is not made permanent. In Hawaii, the C-Corp tax rate would remain at 27.4%, while the small business rate would surge to 50.6%.
However, making the deduction permanent would lead to significant economic benefits, leaving the small business tax rate on a level playing field with its competitors. Additionally, Hawaii is projected to gain 4,000 new jobs annually over the next 10 years if the deduction remains in place, including an annual GDP increase of $210 million for the first decade and $433 million per year beyond 2035.
View the report for Hawaii here. For a two-page graphic of the Hawaii numbers, click here.
“Small businesses don’t just create jobs—they create opportunity, innovation, and strong local economies,” said NFIB Hawaii State Director Michael Iosua. “If Congress allows the 20% Small Business Deduction to expire, a massive tax hike on small businesses will take effect, stifling growth, putting the brakes on hiring, and endangering countless small businesses. With the deduction set to expire this year, lawmakers must act quickly to protect small businesses and the communities they support.”
The 20% Small Business Tax Deduction, a key provision of the Tax Cuts and Jobs Act of 2017, has empowered millions of small business owners to expand, hire employees, and increase wages. If Congress does not act to make it permanent this year, nine out of 10 small businesses will face a significantly higher tax burden, threatening jobs and economic stability nationwide.
Keep up with the latest Hawaii small-business news at www.nfib.com or by following NFIB Hawaii on X @NFIB_HI.
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For more than 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since its founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.
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