Bill · H.R. 1199· House(119-HR-1199)
Small Business Investment Act of 2025
- Introduced
- 2/11/2025
- Last activity
- 2/11/2025 — Referred to the House Committee on Ways and Means.
- Sponsored by
- David Kustoff
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
The Small Business Investment Act of 2025 proposes several changes to the Internal Revenue Code regarding the exclusion of gain from qualified small business stock. It introduces a phased increase for the exclusion percentage based on how many years the stock is held. The bill also changes the required holding period from more than 5 years to at least 3 years. Additionally, it establishes rules for treating stock acquired through the conversion of qualified convertible debt instruments. Finally, it modifies the definition of qualified small business stock to include corporations other than just C corporations and clarifies rules for S corporations.
Yes· 3 of 8
Does this make it easier to run a small business?+8
The bill provides significant tax relief and easier access to capital through debt conversion rules for small businesses.
Would business owners be better off under this?+8
The bill provides significant tax incentives that benefit business owners and their investors.
Does this cut taxes for small businesses?+7
The bill reduces taxes for small business owners by increasing the exclusion percentage for gains on qualified stock and reducing the required holding period.
The opposite
Does this reduce what the federal government owes?-2
The reduction in tax revenue from these exclusions could marginally increase the federal deficit.
Who it would affect, and how
Potential Positive Impacts for People
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Increased Tax Exclusions Based on Holding Time: The bill creates a tiered system where the exclusion percentage increases the longer the stock is held: 50% at 3 years, 55% at 4 years, and 100% at 5 years or more (Section 2(a) and 2(b)).
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Reduced Holding Period Requirement: The requirement to hold stock to qualify for the exclusion is changed from more than 5 years to at least 3 years (Section 2(a)).
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Benefits for Debt Conversions: Taxpayers who acquire stock through the conversion of a qualified convertible debt instrument can have that stock treated as qualified small business stock, and the holding period for the bond or evidence of indebtedness will count toward the stock holding period (Section 3(a)).
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Expanded Eligibility for Corporations: The bill modifies the definition of qualified small business stock to apply to corporations more broadly, rather than being restricted to C corporations (Section 4(a) and 4(b)).
Potential Negative Impacts for People
- No specific negative impacts are explicitly detailed in the provided text.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Economy And Finance
- Improves Small Business Support+8Reduces Capital Gains Tax+7Reduces Small Business Taxes+7Improves Economic Growth+4Increases Job Creation+3Reduces National Debt-2
- Demographic And Interest Groups
- Good For Business Owners+8Good For High Income Households+5Good For High Net Worth Individuals+5
- 2/11/2025
- Referred to the House Committee on Ways and Means.
- Introduced in House
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.