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PARKERSBURG -- A local franchise owner is headed to Washington, D.C., this week to ask legislators to fix a mistake in federal tax code he says will damage small businesses if left unchanged.
Matt Herridge is co-owner of Charlton Management Inc., which operates eight Burger King restaurants and two Qdobas in West Virginia and Ohio. A technical error in the 2017 Tax Cuts and Jobs Act, also known as TCJA, turned a 15-year depreciation schedule for qualified improvement property, or QIP, into a 39-year schedule.
Herridge testified in November at an Internal Revenue Service hearing about the potentially damaging effects of the mistake. Herridge is the president of the Ohio River Coalition, a regional branch of the National Franchisee Association.
"The law, as is currently written, not only places me and my coalition colleagues at an extreme economic disadvantage, but provides the exact opposite result to that which was intended," he said in his testimony. "TCJA intended to provide business owners like me with both 100 percent bonus depreciation and a 15-year depreciation schedule for QIP. (Due to the mistake) the law now excludes business owners like me from taking advantage of both the intended 15-year recovery period and bonus depreciation."
Herridge said the error is costing small business owners, which use those funds to reinvest in developing, expanding and remodeling their businesses, as well as construction and related industries which also rely on those renovation projects.
On Monday, Herridge did an interview with CNBC, and said he is trying to bring more public attention to the issue. Herridge said it has been a particularly frustrating issue because it arises from a technical error and was never intended to affect small business owners in this way.
"Everyone agrees on that: It was a mistake," he said. "That's part of what has been so frustrating about this as a small business owner. We see something that seems to be really easy to resolve, but it ends up being difficult to get done. In the meantime, its affecting real businesses, real people."
Herridge said lawmakers are expected to introduce a standalone bill to correct the error, and he will spend the next two days in Washington, D.C., urging legislators to support and quickly pass the bill.
"I've not talked to all of our representatives yet, but I'm convinced they'll all support this," he said. "We're hoping this standalone bill to fix the error will pass through Congress relatively quickly."