NRF Asks Congress Not to Delay Pro-Job ‘Tax Extenders’ While Considering Tax Reform
By J. Craig Shearman
Washington Retail Insight
April 26, 2012
NRF today urged Congress to renew a federal tax credit that helps retailers hire welfare recipients and a tax rule that allows remodeling of stores to be depreciated more quickly, saying both are needed to help create jobs and should not be put on hold while lawmakers consider comprehensive tax reform.
“NRF strongly supports Chairman Camp’s goal of corporate tax reform,” NRF Vice President and Tax Counsel Rachelle Bernstein said. “However, tax reform will take some time to accomplish, and until that occurs it is important to maintain tax provisions that help stimulate investments and jobs. These provisions need to be extended as expeditiously as possible to eliminate business uncertainty that is causing delays in investment and hiring.”
Bernstein’s comments came in a statement submitted for a hearing being held this morning by the House Ways and Means Committee’s Select Revenue Measures Subcommittee. The panel is considering renewal of the annual package of “tax extenders,” a collection of about three dozen tax laws that were all passed on a temporary basis but are renewed year after year. The latest package expired at the end of 2011 and supporters want the provisions renewed retroactively. But with committee Chairman Dave Camp, R-Mich., and others proposing tax reform that would eliminate most tax credits and deductions in return for lower rates, lawmakers are debating whether the virtually automatic renewal of all of the extenders should come to an end.
Bernstein called for renewal of two provisions, the Work Opportunity Tax Credit, which gives employers as much as $9,000 for hiring disadvantaged or handicapped individuals under several specified categories, and a tax rule allowing improvements to retail stores and restaurants to be depreciated over 15 years rather than the 39 years required before the period was reduced in 2004.
“WOTC is an important employment incentive,” Bernstein said. “In the retail industry it has had proven results encouraging hiring among classes of individuals who might otherwise face difficulty in gaining employment. It also provides resources that are so important in bringing these targeted classes into the labor market.”
Bernstein cited Bureau of Economic Analysis numbers showing that every $1 million spent in construction creates 28 jobs in the overall economy, but said a 39-year depreciation period would drive up costs and discourage investment.
“Because this is such a large increase in the cost of improvements, retailers have slowed down making improvements pending a decision from Congress as to whether these provisions will be extended,” she said. “If the write-off for the cost of improvements is 39 years rather than 15, it will have a negative impact on a retailer’s decision to go forward with their remodeling plans and will cost jobs.”
© 2012 National Retail Federation
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