Fashion Industry Asks for Tax Breaks, FTZ Flexibility, Child Care Funding
In a detailed five-page letter, the fashion industry is asking for broader application of government subsidies to businesses, flexibility in trade regulations, tax breaks, and billions of dollars in funding for day care facilities.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
The American Apparel and Footwear Association, the Council of Fashion Designers of America and the Travel Goods Association sent their requests for the next COVID-19 pandemic relief bill to the leaders of the House and Senate on April 30.
Aside from locally owned boutiques, most companies in the fashion industry are either not eligible for government loans, or the structure of the loans doesn't address their most pressing expenses -- paying foreign manufacturers for the goods they've produced. The trade organizations asked that both ends of that problem be changed in the statute.
They asked for tax breaks for the expenses of buying sneeze guards for cashiers and extra cleaning. They asked that the net operating loss carryback tax benefit be activated immediately “[b]ecause short-term liquidity is critical for many apparel retailers and brands,” by allowing companies to estimate their 2020 tax losses, instead of having to wait to file at the end of the year.
Even as they described the dire straits their companies are in, they asked CBP to lower customs bond requirements. “This would provide companies the liquidity they desperately need to pay employees,” the letter said.
“E-commerce demand and, where permitted, curb-side pick-up demand are insufficient to consume the incoming supply of goods. This leaves retailers with difficult choices: either attempt to sell the goods to off-price liquidators for pennies on the dollar, donate or destroy the goods, or store those goods until the appropriate selling season next year,” AAFA said. They said that limited warehouse capacity in foreign-trade zones “will create a cash-flow crisis if retailers are forced to pay duties on those goods at the time of transfer to non-FTZ offsite facilities.” They asked that off-site warehousing of 12 to 14 months that is duty-free be permitted because that “will significantly ease cash flow concerns and provide retailers the opportunity to salvage goods to sell next year.”
The trade groups endorsed a $50 billion plan by Sen. Elizabeth Warren, D-Mass., to rescue day care facilities. “If childcare providers are not ready to reopen their doors when employees are asked to come back to work, millions of Americans won’t be able to return to their jobs or reopen their businesses,” they said. “This has been exacerbated by plans in many states to re-open businesses while keeping schools closed for the remainder of the year.”