Enhanced Small Business Growth Act of 2026

Bill Number

H.R. 8755

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Taxation

Status

Introduced

Latest Action

2026-05-12: Referred to the House Committee on Ways and Means.

Last Updated

2026-06-03T17:23:39Z

AI-Generated Summary

Purpose This legislation aims to increase tax incentives for certain U.S.-based manufacturing businesses by expanding an existing deduction under the Internal Revenue Code.

Key Provisions

• The bill creates a new subsection in Section 199A that raises the qualified business income deduction rate from 20 percent to 30 percent for eligible domestic manufacturers.
• It adjusts the wage-based limit on the deduction, replacing the current 50 percent threshold with a 100 percent threshold for these businesses.
• A business qualifies as a "qualified domestic manufacturer" if at least 85 percent of its combined qualified business income comes from a qualifying manufacturing activity.
• To meet the manufacturing definition, the business must produce tangible property, and at least 20 percent of the cost of goods sold must come from U.S.-based labor and overhead costs.
• The bill also changes how taxable income is calculated for the deduction by excluding certain limits and itemized deductions, including charitable contributions for those who itemize.
• These changes apply starting with tax years after December 31, 2025.

Significant Changes to Existing Law The measure amends Section 199A of the Internal Revenue Code of 1986, which currently provides a 20 percent deduction on qualified business income. It introduces higher deduction percentages and relaxed limits specifically for domestic manufacturers, along with new eligibility tests based on manufacturing location and cost breakdowns. It also modifies the income computation rules under Section 199A(e)(1) to disregard additional deductions.

Potential Impacts

• Government agencies, particularly the Internal Revenue Service, would need to update forms, guidance, and enforcement procedures to apply the new rules.
• U.S. manufacturing businesses meeting the criteria could see reduced tax liability, potentially supporting domestic production activities.
• No direct effects on international relations are specified in the bill.

Main Stakeholders Affected

• Domestic manufacturing businesses and their owners.
• Taxpayers who claim the qualified business income deduction.
• The Committee on Ways and Means and the Internal Revenue Service.
• Broader small business community that may qualify under the new domestic manufacturing criteria.

Notable Legal, Constitutional, or Political Implications The bill operates within Congress's established authority to modify tax provisions. It does not alter constitutional structures or introduce new regulatory frameworks beyond tax administration. The changes focus solely on adjusting deduction rates and eligibility without creating new enforcement mechanisms.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Miller, Carol D. [R-WV-1]

Recent Actions

• 2026-05-12: Referred to the House Committee on Ways and Means.
• 2026-05-12: Introduced in House
• 2026-05-12: Introduced in House

Bill Versions

• Enhanced Small Business Growth Act of 2026 — issued 2026-05-12 — PDF (4 pages)