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Small Business Investor Tax Parity Act of 2025
To amend the Internal Revenue Code of 1986 to allow the deduction under section 199A to apply to qualified BDC interest dividends in the same manner as qualified REIT dividends.
Summary
This bill would amend the Internal Revenue Code to allow the qualified business income deduction under section 199A to apply to qualified interest dividends from business development companies in the same manner as qualified dividends from real estate investment trusts. The bill defines "qualified BDC interest dividend" as dividends from an electing business development company that are attributable to net interest income properly allocable to a qualified trade or business. The provision would be effective for taxable years beginning after December 31, 2026.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
- Sen. Banks, Jim [R-IN] (R-IN)
2 cosponsors
- Sen. Cornyn, John [R-TX] (R-TX)
- Sen. Daines, Steve [R-MT] (R-MT)
Actions (2)
- Oct 1, 2025 Read twice and referred to the Committee on Finance. · senate
- Oct 1, 2025 Introduced in Senate
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Full text
IN THE SENATE OF THE UNITED STATES
October 1, 2025
Mr. Banks introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to allow the deduction under section 199A to apply to qualified BDC interest dividends in the same manner as qualified REIT dividends.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Small Business Investor Tax Parity Act of 2025”.
SEC. 2. DEDUCTION FOR QUALIFIED BUSINESS INCOME TO APPLY TO CERTAIN INTEREST DIVIDENDS OF QUALIFIED BUSINESS DEVELOPMENT COMPANIES.
(a) In General.—Subsections (b)(1)(B) and (c)(1) of section 199A of the Internal Revenue Code of 1986 are each amended by inserting “, qualified BDC interest dividends,” after “qualified REIT dividends”.
(b) Qualified BDC Interest Dividend Defined.—Section 199A(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(5) Qualified bdc interest dividend.—
“(A) In general.—The term ‘qualified BDC interest dividend’ means any dividend from an electing business development company received during the taxable year which is attributable to net interest income of such company which is properly allocable to a qualified trade or business of such company.
“(B) Electing business development company.—For purposes of this paragraph, the term ‘electing business development company’ means a business development company (as defined in section 2(a) of the Investment Company Act of 1940) which has an election in effect under section 851 to be treated as a regulated investment company.”.
(c) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2026. <all>
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