I
119THCONGRESS
1
STSESSION H. R. 110
To amend the Internal Revenue Code of 1986 to expand the deduction
for qualified business income, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY3, 2025
Mr. B
IGGSof Arizona introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to expand
the deduction for qualified business income, and for other
purposes.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Small Business Pros-4
perity Act of 2025’’. 5
SEC. 2. INCREASE AND EXPANSION OF DEDUCTION FOR 6
QUALIFIED BUSINESS INCOME. 7
(a) D
EDUCTIONMADEPERMANENT.—Section 199A 8
of the Internal Revenue Code of 1986 is amended by strik-9
ing subsection (i). 10
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(b) DEDUCTIONTOACHIEVE ATOPRATE ON 1
Q
UALIFIEDBUSINESSINCOME OF21 PERCENT.—Sub-2
sections (a)(2) and (b)(1)(B) of section 199A of such Code 3
are each amended by striking ‘‘20 percent’’ and inserting 4
‘‘43 percent (47 percent in the case of any taxable year 5
beginning after December 31, 2025)’’. 6
(c) R
EPEAL OFLIMITATIONBASED ONW–2 WAGES 7
P
AIDWITHRESPECT TO THETRADE ORBUSINESS, TOP 8
R
ATE ON QUALIFIEDBUSINESSINCOME.—Section 9
199A(b)(2) of such Code is amended to read as follows: 10
‘‘(2) D
ETERMINATION OF DEDUCTIBLE 11
AMOUNT FOR EACH TRADE OR BUSINESS .—The 12
amount determined under this paragraph with re-13
spect to any qualified trade or business is 43 percent 14
(47 percent in the case of any taxable year begin-15
ning after December 31, 2025) of the taxpayer’s 16
qualified business income with respect to the quali-17
fied trade or business.’’. 18
(d) R
EPEAL OFEXCLUSION OFSPECIFIEDSERVICE 19
T
RADES ORBUSINESSES.—Section 199A(d) of such Code 20
is amended to read as follows: 21
‘‘(d) Q
UALIFIEDTRADE ORBUSINESS.—For pur-22
poses of this section, the term ‘qualified trade or business’ 23
means any trade or business other than the trade or busi-24
ness of performing services as an employee.’’. 25
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(e) CONFORMINGAMENDMENTS.— 1
(1) Section 199A(b) of such Code is amended— 2
(A) by striking paragraphs (3), (4), and 3
(6), and redesignating paragraphs (5) and (7) 4
as paragraphs (3) and (4), respectively, and 5
(B) by striking ‘‘the lesser of—’’ and all 6
that follows in paragraph (4) (as so redesig-7
nated) and inserting ‘‘9 percent of so much of 8
the qualified business income with respect to 9
such trade or business as is properly allocable 10
to qualified payments received from such coop-11
erative’’. 12
(2) Section 199A(e) of such Code is amended 13
by striking paragraph (2). 14
(3) Section 199A(f)(1) of such Code is amended 15
to read as follows: 16
‘‘(1) A
PPLICATION TO PARTNERSHIPS AND S 17
CORPORATIONS.— 18
‘‘(A) I
N GENERAL.—In the case of a part-19
nership or S corporation— 20
‘‘(i) this section shall be applied at the 21
partner or shareholder level, and 22
‘‘(ii) each partner or shareholder shall 23
take into account such person’s allocable 24
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share of each qualified item of income, 1
gain, deduction, and loss. 2
For purposes of this subparagraph, in the case 3
of an S corporation, an allocable share shall be 4
the shareholder’s pro rata share of an item. 5
‘‘(B) T
REATMENT OF TRADES OR BUSI -6
NESS IN PUERTO RICO.—In the case of any tax-7
payer with qualified business income from 8
sources within the commonwealth of Puerto 9
Rico, if all such income is taxable under section 10
1 for such taxable year, then for purposes of 11
determining the qualified business income of 12
such taxpayer for such taxable year, the term 13
‘United States’ shall include the Commonwealth 14
of Puerto Rico.’’. 15
(4) Section 199A(f)(4)(A) of such Code is 16
amended by striking ‘‘and wages’’. 17
(5) Section 199A(g)(1) of such Code is amend-18
ed by striking subparagraph (B) and redesignating 19
subparagraph (C) as subparagraph (B). 20
(6) Section 199A of such Code is amended by 21
striking subsection (h). 22
(f) E
FFECTIVEDATE.—The amendments made by 23
this section shall apply to taxable years beginning after 24
December 31, 2024. 25
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SEC. 3. NO TAXABLE EVENT FOR CHANGE OF CORPORATE 1
FORM. 2
Notwithstanding any provision of the Internal Rev-3
enue Code of 1986, a change in the organizational struc-4
ture of a corporation, however organized, into another or-5
ganizational structure is not a taxable event for the pur-6
poses of such Code if there is no change among the own-7
ers, their ownership interests, or the assets of the organi-8
zation (other than a de minimis change in such assets). 9
The preceding sentence shall apply to changes in organiza-10
tional structure occurring after December 31, 2024. 11
SEC. 4. REPEAL OF ESTATE TAX AND RETENTION OF BASIS 12
STEP-UP. 13
Effective for estates of decedents dying after Decem-14
ber 31, 2024, chapter 11 of the Internal Revenue Code 15
of 1986 is repealed. 16
Æ
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