Bills · HR 652
IN COMMITTEE· 119TH CONGRESS
House BillHR 652Taxation
Small Business Investor Tax Parity Act of 2025
INTRO JAN 23· LAST ACTION JAN 23
READING
2MIN
COSPONSORS
4BIPARTISAN
READER REACTIONS0 TOTAL
NO VOTES YET · BE THE FIRST
- Introduced only
LEGISLATIVE PROGRESS
STEP 2 / 8Introduced
In Committee
Reported
Passed House
Passed Senate
Conference
To President
Became Law
WHAT THE BILL DOES
AI-writtenVoters should care about this bill because it touches upon how federal tax policy influences investment decisions and support for small businesses. If this bill becomes law, it could make investing in Business Development Companies (BDCs) more appealing due to the tax savings, potentially channeling more money towards the small and medium-sized businesses that BDCs typically fund. This could, in turn, stimulate growth and job creation in various sectors of the economy by expanding access to capital for these businesses.
If the bill does not pass, the current tax treatment remains, meaning investors in BDCs would not receive the 20% deduction that REIT investors currently enjoy. This might reduce the incentive for capital to flow into BDCs compared to other investment opportunities, potentially limiting a source of funding for smaller enterprises. The bill highlights the ongoing discussion about achieving fairness in the tax code across different investment types and using tax incentives to support specific economic sectors.
KEY PROVISIONS
4AI-extractedPROVISION 01
Amends the Internal Revenue Code (Section 199A) to include "qualified BDC interest dividends" alongside "qualified REIT dividends" for the 20% qualified business income deduction.
This extends a significant tax benefit to investors in Business Development Companies, potentially making these investments more attractive.
PROVISION 02
Defines "qualified BDC interest dividend" as a dividend from an electing business development company, attributable to its net interest income from a qualified trade or business.
This clarifies the specific type of income from BDCs that will be eligible for the new tax deduction, ensuring precision in its application.
PROVISION 03
Defines an "electing business development company" as a Business Development Company that has chosen to be treated as a regulated investment company (RIC) for tax purposes.
This specifies which BDCs must meet certain regulatory and tax election requirements for their investors to qualify for the deduction.
PROVISION 04
Establishes that the amendments made by this bill will take effect for taxable years beginning after December 31, 2026.
This provides a clear future start date for when the new tax deduction will become available to eligible investors.
SPONSORSHIP
1 + 4
R· Texas
YRS IN OFFICE
9
BILLS LED
59
COSPONSOR BREAKDOWNBIPARTISAN · 50%
DEM 3 REP 1 IND 0
ACTION TIMELINE
2 EVENTSJAN 23
Introduced in House
JAN 23
Referred to the House Committee on Ways and Means.
BILL INFO
TypeHouse Bill
NumberHR 652
Congress119th
StatusIn Committee
IntroducedJan 23, 2025
Last actionJan 23, 2025
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IN COMMITTEE· 119TH CONGRESS · WAYS AND MEANS COMMITTEE · INTRODUCED JAN 23, 2025
House BillHR 652Taxation
Small Business Investor Tax Parity Act of 2025
INTRODUCED JAN 23, 2025· LAST ACTION JAN 23, 2025
PASSAGE CHANCES
—%
READING
2 min
COSPONSORS
4
COMPLEXITY
Moderate
