Restaurants and retailers would be able to immediately write off the costs of facility improvements under legislation introduced March 26 by Reps. Jimmy Panetta (D-Calif.) and Jackie Walorski (R-Ind.).
The bipartisan legislation would fix an error in the 2017 tax law known as the “retail glitch.”
The law assigned certain types of capital a longer cost recovery period, making them ineligible for an immediate write-off. Instead, changes such as facility improvements now have a 39-year cost recovery period.
The restaurant and retail industries have come out in favor of a fix: Hundreds of companies, including McDonald’s Corp., Rite Aid, and Macy’s, Inc., asked Treasury Secretary Steven Mnuchin in 2018 to issue guidance resolving the glitch. However the Treasury Department said it is up to Congress to fix the law.
Democratic leadership so far haven’t been keen to resolve errors in what they see as a Republican product. The tax law (Pub. L. No. 115-97) passed on straight-party line votes, with no Democrats supporting the overhaul.
The House bill is a companion measure to Senate legislation (S. 803) introduced by Sens. Pat Toomey (R-Pa.) and Doug Jones (D-Ala.) earlier in March.