07 Dec Have Sneaker Companies Drawn Short Straw in GOP Tax Reform?
The athletic footwear and apparel industry is facing perhaps the last thing it anticipated after the Election Day triumph of Donald Trump and the business-friendly Republican party — a possible big tax hike.
A sweeping tax reform proposal championed by House Republicans contains a nasty surprise for Nike, Under Armour and many other companies that sell imported goods in the U.S. Though the plan would cut the corporate tax rate from 35 percent to 20 percent, it also would disallow certain deductions for importers, costing them untold millions.
Matt Priest, chief executive of the Footwear Distributors and Retailers of America, said the changes in the proposal’s fine print would cost the industry more than it would save with the corporate tax rate reductions. To cover those new costs, the companies would probably have to implement double-digit price increases.