NRF Pushes for Faster Deductions for Store Remodels

NRF Pushes for Faster Deductions for Store Remodels

The National Retail Federation called on the U.S. House of Representatives to quickly pass two pieces of legislation that would help retailers remodel their stores by making important tax provisions permanent.

“Retailers update or remodel their stores every five to seven years to remain competitive, but the high after-tax cost of making these investments often delays these much-needed updates,” NRF Senior Vice President David French said. “These bills would provide important investment incentives that would spur our sluggish economy.”

H.R. 765, the Restaurant and Retail Jobs and Growth Act, sponsored by Representative Mike Kelly, R-Pa., and H.R. 2510, a measure permitting “bonus depreciation” sponsored by Representative Pat Tiberi, R-Ohio, were approved today by the House Ways and Means Committee, clearing the way for consideration by the full House.

The Kelly bill would make permanent a provision allowing retailers to write off the cost of remodeling and other improvements to their stores over 15 years instead of the standard 39-year timeline for buildings. The Tiberi bill would make permanent a provision that allows businesses that make capital investments, including leasehold improvements, to deduct half the cost immediately and then depreciate the remainder over the appropriate period. In addition, it would expand the provision to include owned stores rather than only leased stores. Both provisions were in place on a temporary basis until they expired at the end of 2014, but would be renewed retroactively under the legislation and become a permanent part of tax law.

For more on the legislation and examples of how it would apply, read the RNF’s release here.