Tax Relief for New Businesses Act
Sponsored By: Senator Rosen, Jacky [D-NV]
Introduced
Summary
Consolidates start-up and organizational expenditures into a single Section 195 deduction and raises the immediate expensing thresholds. It would also change how partnerships treat these costs and create separate net operating loss rules for start-up losses.
Show full summary
- Startups and new businesses: Combines start-up and organizational costs into one deduction and raises the immediate expensing threshold to $50,000 with the phase-out starting at $50,000 and ending at $150,000. This lets more early costs be deducted sooner for qualifying taxpayers.
- Partnerships and S corporations: Requires the election and amortization rules to be made and applied at the entity level for partnerships and S corporations. It also adds a new Section 709 that disallows deductions for syndication fees and for amounts paid to promote or sell a partnership interest.
- Net operating losses: Creates a separate "start-up and organizational" NOL category, applies a 100 percent applicable percentage instead of 80 percent to those NOLs, excludes a specific subsection from applying to them, and requires an irrevocable election to use the special rules.
Personalized for You
How does this bill affect your finances?
Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
3 provisions identified: 1 benefits, 1 costs, 1 mixed.
Bigger startup deduction for new businesses
If enacted, you could treat organizational costs the same as start-up costs. You could deduct up to $50,000 right away. The immediate deduction phases out once combined costs reach $150,000. For partnerships and S corporations, the entity must make the election. The bill would add a special, irrevocable NOL election to treat start-up and organizational losses separately. These rules would apply to expenses in tax years starting after Dec 31, 2025.
No deduction for partnership syndication fees
If enacted, partnerships and partners could not deduct fees paid to sell or promote partnership interests. The ban applies to amounts paid in tax years starting after Dec 31, 2025. If your partnership pays these fees, your partnership or your partner-level taxable income could be higher.
Repeal of organization expenditures rule
If enacted, section 248 on organization expenditures would be repealed. The bill removes many cross-references and parenthetical exceptions across the tax code. These changes would apply to expenses in tax years starting after Dec 31, 2025. Some taxpayers could see simpler rules, while others could face different tax treatment because many code provisions are edited.
Sponsors & CoSponsors
Sponsor
Rosen, Jacky [D-NV]
NV • D
Cosponsors
Sen. Shaheen, Jeanne [D-NH]
NH • D
Sponsored 5/6/2025
Sen. Baldwin, Tammy [D-WI]
WI • D
Sponsored 5/6/2025
Sen. Wyden, Ron [D-OR]
OR • D
Sponsored 5/6/2025
Sen. Blumenthal, Richard [D-CT]
CT • D
Sponsored 5/6/2025
Amy Klobuchar
MN • D
Sponsored 5/6/2025
Sen. Heinrich, Martin [D-NM]
NM • D
Sponsored 5/6/2025
Sen. Coons, Christopher A. [D-DE]
DE • D
Sponsored 5/6/2025
Elissa Slotkin
MI • D
Sponsored 5/6/2025
Sen. Gallego, Ruben [D-AZ]
AZ • D
Sponsored 5/6/2025
Sen. Alsobrooks, Angela D. [D-MD]
MD • D
Sponsored 5/6/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov