Small Business Investor Tax Parity Act of 2025

Key Points

• This bill changes the tax code to give a break to people who invest in Business Development Companies. These are special groups that provide money and loans to help small and medium-sized American businesses grow.
• Currently, people who invest in real estate funds get a 20 percent deduction on their tax returns for the money they make. This bill would allow investors in business development funds to get that same 20 percent deduction.
• The goal is to make investing in small businesses just as attractive as investing in real estate. By lowering the tax bill for these investors, the bill hopes to get more money into the hands of local businesses that need it.
• These changes would not start right away. If the bill becomes law, the new tax rules would take effect for the tax year starting in 2027.

Impact Analysis

Govbase has not yet run an impact analysis on this legislation.