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Tax Reform 

   

Congress and the Administration should recognize the importance of growing franchise businesses and ensure that tax policy does not impede their growth. The International Franchise Association encourages Congress to pass revenue-neutral comprehensive tax reform. Since more than 80 percent of franchise businesses declare their business income on their personal income tax return, reform of both individual and corporate rates is needed to ensure that franchise owners and other businesses organized as pass-throughs are not disadvantaged by an approach that only reforms corporate tax rates.  

 

We ask Congress and the Administration to address corporate and individual tax reforms as a package and not with piecemeal fixes. Any effort to reform that removes important business tax deductions should lower the overall tax rate for both corporations and individuals.  

 

Congress has identified updating the current tax code as a priority in this Congress. IFA has taken a leadership role in pushing for reforms that impact both the individual and corporate portions of the code, as the franchise business model requires the successful partnership of franchisors (C-Corporations) and franchisees (primary S-Corporations, LLP's and LLC's, Partnerships and Sole Proprietorships).  

 

The goal in reform is to have a simplified tax code that lowers the statutory rates both corporations and pass-through businesses pay, while the revenues the federal government takes in remain neutral. The franchise industry is united in its commitment to comprehensive tax reform and would oppose any attempt to rewrite the tax code that does not include a lower overall rate for both corporations and individuals.  

 

Any efforts at tax reform must be comprehensive - both corporate and individual - to serve the needs of the franchise community. Renewing America's competitiveness through tax reform and job creation is crucial, but reform should not pick winners and losers between large and small businesses.  

 

For more information, please contact Jay Perron, Vice President of Government Relations and Public Policy at jperron@franchise.org or (202)662-0797