Their Take: Small Businesses Argue Against Tax Mandate in American Rescue Plan

The NFIB Small Business Legal Center filed an amicus brief in the case Arizona v. Yellen at the Ninth Circuit Court of Appeals supporting Arizona in its challenge to the provision in the American Rescue Plan Act of 2021 that would prevent states from using funds for tax relief, directly or indirectly.

“Congress passed the American Rescue Plan to help lessen the financial damage caused by the COVID-19 pandemic,” said Karen Harned, Executive Director of NFIB’s Small Business Legal Center. “Arizona small businesses are recovering from the pandemic and would benefit from any financial assistance, including tax relief. Preventing states from cutting taxes is eroding state sovereignty and small businesses are the ones losing much-needed assistance.”

The American Rescue Plan Act of 2021 made funds available to states if and only if states agree to not pass any laws or take any administrative actions that decrease their net revenue, whether that decrease comes through tax credits, rebates, reductions in tax credits, or new and expanded deductions. NFIB filed an amicus brief supporting the State in the district court proceedings, but the court denied Arizona’s motion to enjoin enforcement of the challenged provision. On appeal, NFIB filed the amicus brief with the U.S. Chamber of Commerce and believes the district court’s decision should be reversed.

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.