IFA Applauds Small Business Protections in Draft Tax Legislation

Budget reconciliation language would increase pass-through deduction to 23% and make it permanent; Prevent tax hikes on hundreds of thousands of franchise small businesses

WASHINGTON – The International Franchise Association (IFA) today applauded draft tax legislation released Friday by the U.S. House Ways and Means Committee, which included several provisions critical to preventing a tax hike on America’s 850,000 franchise small businesses. IFA Chief Advocacy Officer Michael Layman released the following statement in support of the legislation:

“IFA commends the U.S. House Ways and Means Committee’s draft tax legislation, which includes several provisions essential to small businesses. The legislation increases the Section199A deduction to 23% and makes the provision permanent, reducing the tax burden on franchise owners and giving them more savings to reinvest in their businesses and their employees. Nearly all franchise owners are structured as pass-through businesses, and without this legislation they would face a significant tax increase at the end of the year.

“Franchise owners are vital contributors to the U.S. economy, and it is essential that Congress acts before several provisions they rely on expire at the end of the year. By providing greater financial certainty, this enhanced deduction would empower small business owners to grow, support their workforce, and contribute to sustained economic growth and prosperity. IFA urges lawmakers to act and implement this vital extension.”

Last week, IFA President and CEO Matt Haller joined leaders from the National Restaurant Association and American Hotel & Lodging Association on a letter urging Congress to “act expeditiously to prevent expiring business, individual, and family tax provisions from causing a tax increase on millions of small and family-owned businesses across the nation.”

Haller also joined U.S. Rep. Kevin Hern (R-OK) in an op-ed in the Washington Reporter on the importance of Congress acting on extended the Tax Cuts and Jobs Act, saying the Section 199A provisions specifically “has enabled franchisees to increase investment in their business, which drives growth and innovation. Meanwhile, the extra financial breathing room enabled the hiring of more employees and provided better benefits to existing team members.”

Further, multi-unit franchisee and IFA Board Member Jerry Akers testified last month before the joint U.S. House and Senate Small Business Committee on the importance of the Section 199A provision to his business, and nearly all franchise small businesses.

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About the International Franchise Association:

Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the approximately 830,000 franchise establishments that support nearly 8.8 million direct jobs, $896.9 billion of economic output for the U.S. economy, and almost 3 percent of the gross domestic product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.