I 

119TH CONGRESS 

1ST SESSION 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 

JANUARY 3, 2025 

Mr. BIGGS of 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Small Business Pros5 perity Act of 2025’’. 

6 SEC. 2. INCREASE AND EXPANSION OF DEDUCTION FOR 

7 QUALIFIED BUSINESS INCOME. 

8 (a) DEDUCTION MADE PERMANENT.—Section 199A 

9 of the Internal Revenue Code of 1986 is amended by strik10 ing subsection (i). 


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1 (b) DEDUCTION TO ACHIEVE A TOP RATE ON

2 QUALIFIED BUSINESS INCOME OF 21 PERCENT.—Sub3 sections (a)(2) and (b)(1)(B) of section 199A of such Code 

4 are each amended by striking ‘‘20 percent’’ and inserting 

5 ‘‘43 percent (47 percent in the case of any taxable year 

6 beginning after December 31, 2025)’’. 

7 (c) REPEAL OF LIMITATION BASED ON W–2 WAGES

8 PAID WITH RESPECT TO THE TRADE OR BUSINESS, TOP

9 RATE ON QUALIFIED BUSINESS INCOME.—Section 

10 199A(b)(2) of such Code is amended to read as follows: 

11 ‘‘(2) DETERMINATION OF DEDUCTIBLE

12 AMOUNT FOR EACH TRADE OR BUSINESS.—The 

13 amount determined under this paragraph with re14 spect to any qualified trade or business is 43 percent 

15 (47 percent in the case of any taxable year begin16 ning after December 31, 2025) of the taxpayer’s 

17 qualified business income with respect to the quali18 fied trade or business.’’. 

19 (d) REPEAL OF EXCLUSION OF SPECIFIED SERVICE

20 TRADES OR BUSINESSES.—Section 199A(d) of such Code 

21 is amended to read as follows: 

22 ‘‘(d) QUALIFIED TRADE OR BUSINESS.—For pur23 poses of this section, the term ‘qualified trade or business’ 

24 means any trade or business other than the trade or busi25 ness of performing services as an employee.’’. 


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1 (e) CONFORMING AMENDMENTS.— 

2 (1) Section 199A(b) of such Code is amended— 

3 (A) by striking paragraphs (3), (4), and 

4 (6), and redesignating paragraphs (5) and (7) 

5 as paragraphs (3) and (4), respectively, and 

6 (B) by striking ‘‘the lesser of—’’ and all 

7 that follows in paragraph (4) (as so redesig8 nated) and inserting ‘‘9 percent of so much of 

9 the qualified business income with respect to 

10 such trade or business as is properly allocable 

11 to qualified payments received from such coop12 erative’’. 

13 (2) Section 199A(e) of such Code is amended 

14 by striking paragraph (2). 

15 (3) Section 199A(f)(1) of such Code is amended 

16 to read as follows: 

17 ‘‘(1) APPLICATION TO PARTNERSHIPS AND S

18 CORPORATIONS.— 

19 ‘‘(A) IN GENERAL.—In the case of a part20 nership or S corporation— 

21 ‘‘(i) this section shall be applied at the 

22 partner or shareholder level, and 

23 ‘‘(ii) each partner or shareholder shall 

24 take into account such person’s allocable 


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1 share of each qualified item of income, 

2 gain, deduction, and loss. 

3 For purposes of this subparagraph, in the case 

4 of an S corporation, an allocable share shall be 

5 the shareholder’s pro rata share of an item. 

6 ‘‘(B) TREATMENT OF TRADES OR BUSI7 NESS IN PUERTO RICO.—In the case of any tax8 payer with qualified business income from 

9 sources within the commonwealth of Puerto 

10 Rico, if all such income is taxable under section 

11 1 for such taxable year, then for purposes of 

12 determining the qualified business income of 

13 such taxpayer for such taxable year, the term 

14 ‘United States’ shall include the Commonwealth 

15 of Puerto Rico.’’. 

16 (4) Section 199A(f)(4)(A) of such Code is 

17 amended by striking ‘‘and wages’’. 

18 (5) Section 199A(g)(1) of such Code is amend19 ed by striking subparagraph (B) and redesignating 

20 subparagraph (C) as subparagraph (B). 

21 (6) Section 199A of such Code is amended by 

22 striking subsection (h). 

23 (f) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to taxable years beginning after 

25 December 31, 2024. 


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1 SEC. 3. NO TAXABLE EVENT FOR CHANGE OF CORPORATE 

2 FORM. 

3 Notwithstanding any provision of the Internal Rev4 enue Code of 1986, a change in the organizational struc5 ture of a corporation, however organized, into another or6 ganizational structure is not a taxable event for the pur7 poses of such Code if there is no change among the own8 ers, their ownership interests, or the assets of the organi9 zation (other than a de minimis change in such assets). 

10 The preceding sentence shall apply to changes in organiza11 tional structure occurring after December 31, 2024. 

12 SEC. 4. REPEAL OF ESTATE TAX AND RETENTION OF BASIS 

13 STEP-UP. 

14 Effective for estates of decedents dying after Decem15 ber 31, 2024, chapter 11 of the Internal Revenue Code 

16 of 1986 is repealed. 

Æ 


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