Bill · S. 695· Senate(119-S-695)
Small Business Investment Act of 2025
- Introduced
- 2/24/2025
- Last activity
- 2/24/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- John Cornyn
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
The Small Business Investment Act of 2025 seeks to amend the Internal Revenue Code of 1986 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 includes new provisions for tracking the holding period of convertible debt instruments. The Act expands the definition of qualified small business stock and clarifies rules for S corporations.
Yes· 3 of 6
Does this make it easier to run a small business?+8
The bill expands benefits for small businesses by reducing holding periods and broadening the types of qualifying corporations.
Would business owners be better off under this?+8
The bill offers more flexible holding periods and higher tax exclusions for business stock owners.
Does this cut the tax on profits from selling investments?+7
The bill increases the percentage of gain excluded from taxes from a flat 50 percent to up to 100 percent depending on the holding period.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
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Increased Tax Exclusions Based on Holding Time: Under Section 2, taxpayers can benefit from higher exclusion percentages based on a sliding scale: 50% for 3 years, 75% for 4 years, and 100% for 5 years or more. This replaces the previous flat 50 percent exclusion (Section 2(a) and (b)).
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Reduced Holding Period Requirement: The bill changes the required holding period for the exclusion from more than 5 years to at least 3 years (Section 2(a)).
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Benefits for Debt Conversion: Taxpayers who acquire stock through the conversion of a qualified convertible debt instrument can have that stock treated as having been held for the entire time the debt instrument was held (Section 3(a)).
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Broader Eligibility for Corporations: The bill modifies the definition of qualified small business stock by striking the specific requirement that the entity must be a C corporation (Section 4(a) and (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+7Improves Economic Growth+5Increases Job Creation+4
- Demographic And Interest Groups
- Good For Business Owners+8Good For High Income Households+6
- 2/24/2025
- Read twice and referred to the Committee on Finance.
- Introduced in Senate
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.