Posted: Dec 26, 2019
Trump’s tax plan, in an effort to simplify things, was supposed to consolidate these three classes of property into one item called qualified improvement property. It’s known as “QIP” to restaurant industry experts, and it’s supposed to have a 15-year recovery period for depreciation. But in an oversight, policymakers didn’t assign QIP a 15-year time horizon or make it eligible for bonus depreciation.
The end result: QIP must be depreciated over 39 years. That has placed pressure on the cash flow and profits of restaurants, said Travis. It has also deterred capital investment by small business owners, Travis believes.
A fix to the issue was not included in the year-end $1.4 trillion spending bill that consumed some 2,300 pages despite lobbying from industry veterans such as Travis. Bizarre.
“I think this administration has tried very hard to help small businesses, and I think the Tax and Jobs Act that came out in 2017 was intended to do that. So that has been good, and they have shown flexibility to organization like franchisees,” Travis, 70, told Yahoo Finance. Travis added that the government oversight is having a “terrible effect” on small businesses, especially in the restaurant space.
Time for lawmakers to dust off their accounting books, talk to small restaurant owners and get this fixed. Let’s get real here.
By Brian Sozzi
December 26, 2019
Source: Yahoo Finance
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