News & Insights

NAM: Sen. Daines, H.R. 1 permanently extended the Section 199A pass-through deduction, preventing the substantial tax increase that would have hit small manufacturers at the start of 2026. You have been among the Senate’s most persistent champions of pass-through businesses since the Tax Cuts and Jobs Act was enacted. What does achieving permanency mean for small manufacturers in Montana and across the country? 

Sen. Daines: Our small businesses and manufacturers are the backbone of our country’s economy, driving growth and investment across states like Montana. Since I entered Congress, I prioritized the need to protect this industry and warned of what a less competitive America looks like. 

I championed the small business deduction in 2017, and last year, I led the charge on making sure this and other pro-growth provisions became permanent. Clarity and certainty are two of the most important things these job creators need to be as successful as possible, and making 199A permanent delivered both.

NAM: You introduced the Main Street Tax Certainty Act specifically to make the 199A deduction permanent. H.R. 1 accomplished that goal. How did your legislation and sustained advocacy help build the political and policy case for permanency in the reconciliation package, and were there particular provisions in the final bill—beyond the basic permanency—that reflect your priorities for pass-through manufacturers? 

Sen. Daines: As important as it was to make sure this provision was included in 2017, it was imperative we avoided the steep tax increase small businesses and manufacturers faced if we let this expire. Since the day the TCJA was signed into law, we pushed to make this provision permanent. Businesses from every state came in and helped us tell the story of what this means for them. When the time came to draft the Working Families Tax Cuts, the Main Street Tax Certainty Act was one of the most co-sponsored bills in the Senate. We had nearly all Republican senators on that bill advocating for its inclusion in final passage, and we achieved exactly that.

NAM: The Senate Finance Committee conducted detailed working group discussions ahead of H.R. 1. What arguments proved most decisive in the Senate debate over 199A permanency, and are there remaining gaps or unresolved issues in the tax treatment of pass-through manufacturers that you believe should be addressed in future legislation? 

Sen. Daines: Good policies are easy to defend, and the economic data behind 199A spoke for itself. Pass-through businesses employ more than half of private–sector workers, [and] more than 96% of businesses in our country are organized as pass-throughs. The deduction itself is directly responsible for 2.6 million jobs and $325 billion of the United States’ GDP. Many of these businesses are manufacturers who are the backbone of our competitiveness. A successful manufacturing industry supports the American economy and helps protect us against foreign adversaries.

NAM: Manufacturers appreciate your passion and persistence in securing the 199A deduction for the long term. What can our members do to help ensure the benefits of this provision reach every small manufacturer across the country? 

Sen. Daines: We can see economic data and how policies will broadly operate, but hearing firsthand from businesses [that] have utilized those policies to reinvest and grow makes all the difference. We wouldn’t have been able to get nearly our entire conference onto the Main Street Tax Certainty Act if we didn’t have stories from each state to point to.