Renew law with regards to remodeling of retail stores – NRF

09 Dec '09

2 min read

The National Retail Federation asked the House to renew federal tax law that shortens the time it takes merchants to write off the cost of remodeling done at their stores, saying the provision is helping keep stores open and creates jobs.

“In the current economic climate, some retailers look at remodeling as a way to revitalize a failing store, but the anticipated return has to pay for the costs involved,” NRF Senior Vice President for Government Relations Steve Pfister said. “If the costs must be written off over 39 years, it would be much more difficult to make the decision to remodel the store. Thousands of jobs in the construction industry would be lost if this remodeling is slowed down or canceled.”

Pfister's comments came in a letter to members of the House, which is scheduled to vote Wednesday on H.R. 4213, the Tax Extenders Act of 2009, sponsored by Ways and Means Committee Chairman Charles Rangel, D-N.Y. The measure would extend almost 50 current tax laws set to expire after December 31.

Included in the bill is a provision that would grant a one-year extension to the current 15-year period for depreciation of remodeling work done at retail stores that are owned, any commercial real estate that is leased, and restaurants whether they are owned or leased. Without congressional action, the period would revert to 39 years. The provision would provide an estimated $5.4 billion in tax relief to retailers, restaurants and other businesses over 10 years.

Pfister said the 39-year period is unrealistic because retailers typically remodel stores every five to seven years to maintain customer interest and to compete with other stores. Keeping the period at 15 years “will have a direct and positive impact on employment in the current economy,” he said.

National Retail Federation

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