The National Retail Federation has pleaded Congress to approve legislation that would make a key piece of Federal Tax Law over which the retailers have long relied upon, and give long-term renewal to others.
David French, Senior Vice President for Government Relations, NRF says, “H.R. 2029 is the first step toward fundamental tax reform that our economy so urgently needs. We hope that H.R. 2029 will be a stepping stone to more fundamental tax reform that provides U.S. businesses with a more competitive tax rate, increases investment in the United States, increases wages in the United States and helps the consumer.”
At 35 per cent, the US corporate tax rate is the highest of major world economies, and failure to adopt comprehensive tax reform has resulted in lower gross domestic product, wages and consumer spending, according to a recent NRF study conducted by Ernst and Young.
The National Retail Federation says Tax Extenders Bill could be a ‘Stepping Stone’ to Comprehensive Reform.
The bill would make a permanent provision that would allow retailers to depreciate, remodel and make other improvements in their stores over 15 years, rather than the previous standard of 39 years. The provision, which also applies to restaurants, is important because retailers typically remodel every five to seven years. In addition to helping keep stores attractive to customers and profitable; the remodelling work creates tens of thousands of construction jobs each year.
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French added, “By sorting out which of the provisions should be made permanent, which would be extended for a short time and which would be phased-out, the bill establishes groundwork “so that a final determination on their continuance will be made when Congress finally debates comprehensive tax reform.”
The Protecting Americans from Tax Hikes Act should be passed to provide retailers and myriad other industries that certainly need to create critically needed jobs in this recovering economy and to provide the critical ‘PATH’ to tax reform.
A separate provision that allows 50 per cent of the cost of improvements to be written off under ‘bonus depreciation’ would be extended for five years, and would be expanded to cover stores that are owned rather than just those that are leased.
The Work Opportunity Tax Credit, which gives retailers a tax incentive to hire the disabled, welfare recipients and other economically challenged individuals, would be renewed for five years.
Moreover, The PATH Act “tax extenders” package would renew more than 50 tax provisions that expired at the end of 2014, many of which have been on the books for decades but are typically renewed a year or two at a time and often allowed to lapse. The uncertainty of their status makes long-term planning difficult for retailers and other businesses.
