NRF Supports Renewal of Deprecation Rule to Help Save Retail Jobs

The National Retail Federation today asked the U.S House of Representatives to extend a tax rule that allows retailers to depreciate remodeling and other store improvements over a 15-year period, rather than the previous 39 years. NRF, a Washington, D.C.-based trade association for retailers, claims this move would help save “critically needed” retail jobs.

“If the depreciation provision is not extended, the cost of making needed improvements to a retail store or restaurant must be written off over nearly four decades,” said Steve Pfister, NRF’s senior vice president for government relations. “This would have a significant negative impact on a retailer’s decision to make improvements and, in this economic climate, could result in more store closures, costing retail industry jobs.”

The House is expected to vote this week on H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010. The so-called “tax extenders” bill would retroactively renew about 50 tax provisions that expired at the end of 2009, keeping them in place through the end of 2010.

Included in the tax extenders bill is a provision that allows improvements to retail stores, restaurants and leased commercial property, along with new restaurant construction, to be depreciated over 15 years. The depreciation period was previously 39 years, but was reduced to 15 in 2004 for leased property and restaurants, and expanded in 2008 to include owned retail stores and new restaurant construction.

NRF argued that 39 years is an unrealistic deprecation period given that retailers typically remodel their stores every five to seven years. Remodeling, according to NRF, has been a particularly important tool for keeping stores attractive and profitable during the recession, helping maintain jobs for retail workers and creating construction jobs.

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NRF Supports Renewal of Deprecation Rule to Help Save Retail Jobs

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