A bipartisan bill to fix a tax error was introduced in the U.S. House of Representatives March 26. The measure would help furniture retailers recover some of the costs of expanding or renovating their showrooms, offices, warehouses and other facilities.
Identical legislation was filed March 14 in the Senate, also with sponsors from both parties.
The House bill, titled the Restoring Investments in Improvements Act, was introduced with 14 sponsors – seven Democrats and seven Republicans – led by Reps. Jimmy Panetta (D-Calif.), Steven Horsford (D-Nev.), Jackie Walorski (R-Ind.) and George Holding (R-N.C.). It would correct a drafting error in the Tax Cuts and Jobs Act of 2017. That sweeping legislation meant to accelerate tax write-offs for retail businesses investing in renovations or expansions of their property. Instead, the provision limited the tax break and stretched it out over 39 years – well beyond the expected lifetime of most improvements. The result was to discourage business growth.
The Home Furnishings Association is part of a coalition of business groups that joined to urge Congress to take this important step. Many HFA members have contacted their representatives and senators to ask for support.
“This error affects my business by not allowing me to deduct certain improvements in a timely fashion and therefore keeps me from wanting to make improvements to my business,” Shane Spiller, president of HFA member Spiller Furniture & Mattressin Tuscaloosa, Ala., wrote to Sen. Doug Jones (D-Ala.), a primary sponsor of the Senate bill. “It also keeps me from hiring more people because of the high cost of construction.”
Spiller also contacted Rep. Terri Sewell (D-Ala.), to request her support. She subsequently signed on as a co-sponsor of the House bill.
“The loss of immediate expensing has hurt many of our family owned small businesses that are critical to the success of our Central Coast economies and communities,” Rep. Panetta said in a news release. “The Restoring Investment in Improvements Act fixes that problem, known as the ‘retail glitch,’ by restoring the 15-year schedule for Qualified Improvement Property (QIP) and making these improvements eligible for immediate expensing as was originally intended. Our bill will allow restaurants, retailers and other businesses to make the improvements they need to keep their stores competitive and safe and plan for the future.”
“Tax reform has helped businesses across the country invest, expand and hire more workers, but investments in interior improvements were inadvertently excluded from some tax benefits,” Rep. Walorski said. ”The Restoring Investment in Improvements Act is a small but critical fix for our job creators, and technical corrections like this are a normal part of the process when Congress enacts major reforms. This bipartisan, commonsense bill will allow restaurants, retailers and other small businesses to unlock the full benefits of tax reform and continue driving our nation’s economic growth.”
Other original House sponsors are Reps. Susie Lee (D-Nev.), Andy Barr (R-Ky.), Joyce Beatty (D-Ohio), David McKinley (R-W.Va.), Dina Titus (D-Nev.), Mark Amodei (R-Nev.), Lou Correa (D-Calif.) and Kenny Marchant (R-Texas).