For immediate release
Alisa Harrison, 202-628-8000
Matthew Haller, 202-662-0770
WASHINGTON, April 18-In advance of a scheduled vote tomorrow, the International Franchise Association urged the U.S. House of Representatives to pass the Small Business Tax Cut Act (H.R.9), sponsored by Majority Leader Eric Cantor (R-Va.), as the best way for franchise small businesses to immediately receive a tax cut and hire new workers.
"The short-term tax cut put forth in this bill is critical to franchise owners making decisions about hiring additional workers or expanding their businesses today," said IFA Senior Vice President for Government Relations & Public Policy Judith Thorman in a "Key Vote" letter to all House members. "Though the best approach for tax policy to spur long-term job creation by franchise businesses would be comprehensive tax reform, rather than piecemeal fixes, the Small Business Tax Cut Act would spur growth until a complete overhaul is possible."
The current state of tax uncertainty has forced many franchise business owners to hold back on hiring decisions or hinder new franchise establishment formation. In a recent IFA survey, 88 percent of franchisors and 73 percent of franchisees said the specter of higher taxes at the end of 2012 when current rates expire is negatively impacting their business.
"While the franchise industry is poised for modest growth in 2012 of 163,000 new jobs and 11,538 new establishments created, challenges accessing capital as a result of the current regulatory environment, costs associated with the health care law and tax uncertainty following the expiration of current rates threatens longer-term growth by our industry," said the letter.
The Small Business Tax Cut Act would allow franchise owners with 499 employees or less to deduct 20 percent of their income from taxes, up to 50 percent of their W-2 wages. Small business owners would receive the tax cut in 2012, irrespective of whether they pay the corporate or individual tax rate.
About the International Franchise Association
The International Franchise Association is the world's oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.