Since its enactment in 2017, the Tax Cuts and Jobs Act has helped power growth, job creation and investment across the U.S. economy — and nowhere has that impact been more evident than in the retail industry. As the nation’s largest private-sector employer, the retail sector relies on predictable, pro-growth tax policy to hire workers, invest in stores and supply chains, and deliver value to American consumers.
Read NRF's letter to Congress.
With key TCJA provisions scheduled to expire at the end of this year, we face a critical moment. Without congressional action, businesses and consumers alike would be hit with a staggering $4 trillion tax hike over the next decade. For the retail sector, that kind of uncertainty threatens jobs, investment and the economic momentum we've worked hard to build.
At the National Retail Federation, we are urging lawmakers to extend the TCJA’s business provisions — not just to prevent a tax increase, but to strengthen the competitive environment that has allowed American businesses to thrive.
The TCJA lowered the corporate tax rate from 35% to 21%. In the years since, retailers have used these savings to remodel stores, upgrade technology, boost wages and improve benefits — investments that directly support the 55 million Americans who work in or are supported by the retail sector.
These reforms have also helped retailers remain competitive globally, especially as we continue to compete with international ecommerce platforms and supply chains that are not always subject to the same tax and regulatory burdens.
As Congress debates how to extend TCJA provisions and address long-term fiscal challenges, we are deeply concerned by reports that limiting the business deduction for state and local taxes, known as “B-SALT,” is being considered as a potential revenue offset.
Let us be clear: B-SALT is not a loophole or a tax preference — it’s a basic cost of doing business. Just like wages, rent or utilities, state and local taxes are necessary business expenses and should remain fully deductible.
Capping B-SALT would effectively raise the business tax rate, undermining the competitive gains retailers have made since 2017. According to the American Action Forum, this kind of cap could increase the effective federal business tax rate from 21% to as high as 26%, placing U.S. businesses at a disadvantage compared with foreign competitors. That’s the last thing we should be doing as we work to attract more domestic investment and strengthen the U.S. economy.
Moreover, a B-SALT cap would disproportionately hurt bricks-and-mortar businesses — the very companies investing in American communities through physical stores, distribution hubs and local jobs. It would also reduce GDP, eliminate jobs and create new economic distortions, according to the Tax Foundation.
We also urge Congress to maintain parity between corporate and pass-through businesses when it comes to deducting state and local taxes. Business income should be treated the same, regardless of whether a company is organized as a corporation or a pass-through. Anything less creates an uneven playing field and penalizes entrepreneurship.
Retailers across the country stand ready to work with lawmakers on a tax framework that promotes certainty, competitiveness and continued growth. That means extending key TCJA business provisions, rejecting harmful offsets like B-SALT caps and expanding on the pro-growth policies that have driven job creation, investment and consumer confidence.
Congress has a unique opportunity to build on the success of the TCJA and chart a course that supports U.S. businesses and the millions of Americans who depend on them. Let’s not lose sight of what’s at stake.
For our members, for our workers, and for our economy — the time to act is now.