Knoxville shoe covers business worried about high new tax

Knoxville shoe covers business worried about high new tax

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Terry Finnegan says U.S. Customs is differentiating between this cover and the others. Terry Finnegan says U.S. Customs is differentiating between this cover and the others.

By MONA NAIR
6 News Reporter

KNOXVILLE (WATE) – The owner of a Knoxville company that sells its product all over the world says it's suddenly being unfairly charged a lot of tax.

6 News first featured the Protexer company in a "Made in Tennessee" segment. We showcased their Bootie Butler product. It's an easier way to put on shoe covers or booties at labs, hospitals or work sites.

But a new import tax on those shoe covers could dramatically affect business.

The owner of Protexer says he made a conscious decision to set up in Knoxville. In the last seven years, he's added jobs and helped the economy.

"We have a total of five employees, including the owner," said Chief Operating Officer Terry Finnegan as he showed us around the office.

The warehouse is stacked with boxes packed with different types of shoe covers ready to be shipped around the world.

A misunderstanding over how their product is defined is causing the company to be billed a lot of extra money by U.S. Customs. A letter from the agency singles out just one of their booties and puts it in the same category as a shoe. It raises a five percent tariff charge to a hefty 37 percent. The charge is also retroactive.

"To take this and say this is a shoe, is footwear, is frankly a mistake," Finnegan said. "It's misinterpretation."

The company has hopes to grow so Finnegan says this is a major hit.

"To take tens of thousands of dollars out of our pocket would make us much less competitive in a very competitive market," he added. "In an economy where people are trying to keep their heads above water, this type of situation comes along and takes the wind out of your sails. It makes you feel like the rug is being pulled out from underneath you."

The owner of the company plans to contact local representatives to get some help. He's also started a tedious appeal process.

But he says they have a less than 10 percent chance of getting the decision changed.

6 News contacted U.S. Customs, but hasn't heard back from the agency.

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