December 17, 2015

Dear Member of Congress:



I write today to express the International Franchise Association’s support for the Protecting Americans from Tax Hikes (PATH) Act of 2015. The legislation, which has broad bipartisan support, will provide needed certainty to franchise small business owners while creating a positive starting point for future comprehensive tax reform.

The PATH Act makes many needed improvements to the tax code, but particularly important to small businesses are the permanent extension of Sec. 179 expensing for small business owners; the extension of bonus depreciation rates for five years; the extension of the 15-year straight-line cost recovery for qualified leasehold improvements, restaurant buildings, and retail improvements; and the permanent extension of the research and development tax credit. These tax provisions allow business owners to plan for future growth by purchasing equipment, making investments, and improving their business locations. Many of these provisions are set to expire at the end of this year and have been extended on an annual basis for several years, resulting in years of uncertainty. Although regulatory ambiguity continues for many franchise businesses, the simplified and permanent tax provisions included in the PATH Act would provide some relief to business owners who want to focus their efforts on growing their operations and creating jobs in their local communities rather than sorting through a complicated tax code.

Although passing this tax package would be a notable step towards correcting the complexities and inefficiencies of our tax code, we continue to stress the need for comprehensive tax reform. For years, tax reform has been considered primarily from the viewpoint of large corporations; however, since 80 percent of franchise owners are S Corps and pass-through entities and file their business income on their individual tax returns, individual tax rates must be addressed in order to unlock the potential of America’s locally-owned small businesses. The franchise business community supports comprehensive tax reform that includes improvements to both the individual and corporate tax codes, including lowering effective tax rates for small and large businesses and reducing the complexity of the code. Comprehensive tax reform will make American businesses more competitive globally, while also driving much-needed job creation.

On behalf of the 780,000 franchise business locations nationwide and the nearly 9 million workers they employ, I urge you bolster American small businesses by supporting the PATH Act.

Sincerely, Elizabeth H. Taylor

Vice President, Federal Government Relations, Public Policy & Counsel

International Franchise Association