119-hr110

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 110 Introduced in House

    (IH) ]

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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.

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

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Small Business Prosperity Act of 
2025''.

SEC. 2. INCREASE AND EXPANSION OF DEDUCTION FOR QUALIFIED BUSINESS 
 INCOME.

    (a) Deduction Made Permanent.--

Section 199A of the Internal Revenue 
Code of 1986 is amended by striking subsection
            (i) .

    (b) Deduction To Achieve a Top Rate on Qualified Business Income of 
21 Percent.--Subsections

    (a)

    (2) and

    (b)

    (1)
        (B) of 

section 199A of such 
Code are each amended by striking ``20 percent'' and inserting ``43 
percent (47 percent in the case of any taxable year beginning after 
December 31, 2025)''.
            (c) Repeal of Limitation Based on W-2 Wages Paid With Respect to 
the Trade or Business, Top Rate on Qualified Business Income.--

Section 199A

    (b)

    (2) of such Code is amended to read as follows:
 ``

    (2) Determination of deductible amount for each trade or 
 business.--The amount determined under this paragraph with 
 respect to any qualified trade or business is 43 percent (47 
 percent in the case of any taxable year beginning after 
 December 31, 2025) of the taxpayer's qualified business income 
 with respect to the qualified trade or business.''.
            (d) Repeal of Exclusion of Specified Service Trades or 
Businesses.--

Section 199A
            (d) of such Code is amended to read as 
follows:
 ``
            (d) Qualified Trade or Business.--For purposes of this section, 
the term `qualified trade or business' means any trade or business 
other than the trade or business of performing services as an 
employee.''.

    (e) Conforming Amendments.--

    (1) Section 199A

    (b) of such Code is amended--
        (A) by striking paragraphs

    (3) ,

    (4) , and

    (6) , and 
 redesignating paragraphs

    (5) and

    (7) as paragraphs

    (3) and

    (4) , respectively, and
        (B) by striking ``the lesser of--'' and all that 
 follows in paragraph

    (4) (as so redesignated) and 
 inserting ``9 percent of so much of the qualified 
 business income with respect to such trade or business 
 as is properly allocable to qualified payments received 
 from such cooperative''.

    (2) Section 199A

    (e) of such Code is amended by striking 
 paragraph

    (2) .

    (3) Section 199A

    (f)

    (1) of such Code is amended to read as 
 follows:
 ``

    (1) Application to partnerships and s corporations.--
 ``
        (A) In general.--In the case of a partnership or 
 S corporation--
 ``
            (i) this section shall be applied at the 
 partner or shareholder level, and
 ``
            (ii) each partner or shareholder shall 
 take into account such person's allocable share 
 of each qualified item of income, gain, 
 deduction, and loss.
 For purposes of this subparagraph, in the case of an S 
 corporation, an allocable share shall be the 
 shareholder's pro rata share of an item.
 ``
        (B) Treatment of trades or business in puerto 
 rico.--In the case of any taxpayer with qualified 
 business income from sources within the commonwealth of 
 Puerto Rico, if all such income is taxable under 
 

section 1 for such taxable year, then for purposes of 
 determining the qualified business income of such 
 taxpayer for such taxable year, the term `United 
 States' shall include the Commonwealth of Puerto 
 Rico.''.

    (4) Section 199A

    (f)

    (4)
        (A) of such Code is amended by 
 striking ``and wages''.

    (5) Section 199A

    (g)

    (1) of such Code is amended by striking 
 subparagraph
        (B) and redesignating subparagraph
            (C) as 
 subparagraph
        (B) .

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

    (h) .

    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.

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

 Notwithstanding any provision of the Internal Revenue Code of 1986, 
a change in the organizational structure of a corporation, however 
organized, into another organizational structure is not a taxable event 
for the purposes of such Code if there is no change among the owners, 
their ownership interests, or the assets of the organization (other 
than a de minimis change in such assets). The preceding sentence shall 
apply to changes in organizational structure occurring after December 
31, 2024.

SEC. 4. REPEAL OF ESTATE TAX AND RETENTION OF BASIS STEP-UP.

 Effective for estates of decedents dying after December 31, 2024, 
chapter 11 of the Internal Revenue Code of 1986 is repealed.
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