NFIB Files Brief That Would Provide Vital Small Business Tax Relief

Date: May 03, 2021

Small Business Files Brief Challenging Onerous Government Mandates

The National Federation of Independent Business, or NFIB Legal Center, filed an amicus brief in New Hampshire today supporting the state in its challenge to the provision of the American Rescue Plan Act of 2021 that would prevent states from using federal funds for state tax relief for New Hampshire small business owners.


“Small businesses are still struggling to rebound from the COVID-19 pandemic and need as much financial relief as possible,” said Karen Harned, Executive Director of NFIB’s Small Business Legal Center. “Congress passed the American Rescue Plan to relieve some of the financial pressure caused by the pandemic, but a provision that blocks New Hampshire and other states from cutting taxes is eroding state sovereignty and hurts local businesses.”


Earlier this year, Jane Young, New Hampshire’s Attorney General, initiated a lawsuit questioning Treasury Secretary Janet Yellen over part of the $1.9 trillion American Rescue Plan (ARP) Act that prevents states from using the funds they receive from the law to offset tax cuts.


“New Hampshire has been hit hard by the COVID-19 pandemic,” said Bruce Berke, NFIB State Director in New Hampshire. “Small business owners across the state are already struggling with high taxes. It’s one of their major concerns as they recover financially from COVID-19. If they are not allowed to take advantage of lower taxes, it will take our state even longer to bounce back. The provision in the ARP that blocks states like New Hampshire from cutting taxes will do nothing more than hurt small business owners.


Since 2015, New Hampshire has been reducing small business taxes. Both the state business profits tax ad business enterprise tax were on track to go down last year, however, the pandemic got those efforts off track. In 2020, legislation was proposed to continue the tax decline. That was before the enactment of the American Rescue Plan.


The American Rescue Plan Act of 2021 made funds available to states if and only if states agree to not pass any laws or take any administrative actions that decrease their net revenue, whether that decrease comes through tax credits, rebates, reductions in tax credits, or new or expanded deductions. NFIB believes the court should block this unprecedented tax mandate and grant the states’ motion for a preliminary injunction.


The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

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