Trump tax reform typo creates costly headache for US retailers
US retailers and restaurants say they are shelving hundreds of millions of dollars worth of refurbishment work, from lighting refits to paint jobs, because a mistake in the Trump tax reforms has pushed up the upfront costs.
An apparent typo in the tax law that was rushed through Congress has yet to be fixed 18 months after it was introduced. The changes were supposed to allow businesses to deduct the cost of such work from their tax bills the year it was carried out, but the error means they now need to wait 39 years for full tax relief on store renovations. Several congressman and senators acknowledge the problem has arisen because of an “inadvertent drafting error”.
Organisations including the National Retail Federation, National Grocers Association and National Restaurant Association are pushing lawmakers to adopt legislation to rectify the problem. Several senators and congressmen are supporting the cause but it is unclear when the error will be fixed.
Bob Jones, president of retailer American Sale, which operates nine stores in the Chicago area that sell swimming pools, hot tubs and trampolines, said he was putting off flooring replacements as a result.
“From a competitive standpoint, these are projects that we’re going to have to get done,” he said. “In the old days consumers had to go to stores to buy products, but retail today is really about having an experience that’s worth visiting.”
The tax change had a “substantial” impact that made it hard to justify going ahead with the work, he said. His accountant told him he would only be able to deduct 2.5 per cent of the cost, which runs into several tens of thousands of dollars, in the first year.
https://www.bizjournals.com/seattle/news/2019/05/20/trump-tax-reform-typo-creates-costly-headache-for.html?ana=e_mc_prem&mkt_tok=eyJpIjoiT0dZMVl6ZzVOamhsTmpneiIsInQiOiI0UmJOdE9xMHBzRVpjOVBnb0lXYU9NNWxobmF6NzRmU25iQTB2bGR5Z21qc3pjeW05SVNCVGRaQ0s5M2RGYzNcL1E5NjdISllCYUVtMEhDS0c4czdobEhTRUF5VFBaMkU4YkhqR25FSUViejFSaVJZVU9xRmJmQldXOE5tUXdraFoifQ%3D%3D
= new reply since forum marked as read
