Small Business Investor Tax Parity Act of 2025

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2962 Introduced in Senate (IS)]

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119th CONGRESS
  1st Session
                                S. 2962

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.


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                   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.
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