Aug. 26--Tax inversion is a complicated issue, but John Firth, president of Quality Dining, a Mishawaka-based Burger King franchisee, said he would not anticipate challenges arising if Burger KingWorldwide acquires the Canadian-based
"Burger King will continue to pay tax on 100 percent of all of the income that it earns in the United States and pay that tax at what I believe to be the second-highest rate in the developed world," Firth said.
"I'm generalizing on a complicated tax code," he said, "but Burger King's worldwide income would be subject to U.S. taxes to the extent that Burger King would bring those profits back to the U.S."
Quality Dining operates 165 Burger King restaurants in Indiana, Michigan and Tampa, Fla. It also operates numerous Chili's, Spageddies and Papa Vino's restaurants and owns one Blue2O Seafood Grill.
Burger King has indicated that if the Tim Hortons transaction is consummated, the company will continue to manage the two brands separately and Burger King's corporate office in Miami will be unaffected, Firth said.
"Assuming all that's the case," Firth said, "I'm not overly concerned about the effect on the day-to-day operations and strategic planning for the Burger King brand."
Tax inversion, however, remains a timely and controversial issue.
On Monday, U.S. Sen. Joe Donnelly sent a letter to President Barack Obama expressing concern with the increasing trend of American companies shifting their legal address from the United States to low-tax countries in order to avoid corporate tax liability here at home.
The letter asks that in the absence of quick action by Congress, the president work with the Treasury Department to stop the ongoing abuse of the current tax code.
"Companies that utilize such inversions retain all the benefits of doing business in America, while avoiding the corporate tax liability of their American competitors," Donnelly stated in the letter. "Unfortunately, more than two dozen corporations in recent years have taken advantage of the current tax code to avoid taxes, thereby impeding the competitiveness of businesses that remain in the United States."