Retail tax executives focus on federal legislative and regulatory tax issues impacting the retail industry. In order to provide input, feedback, and leadership on the tax issues of the day, the committee works with the Internal Revenue Service, the Treasury Department and the Congressional tax committees of jurisdiction on a routine basis. For more information contact Dave Koenig at email@example.com.
Tax executives participating on the Tax Committee benefit from:
- Building relationships with other leaders of the industry
- Forums where members can discuss operational practices and concerns, and pragmatic solutions to challenges
- The opportunity via in-person meetings and monthly conference calls to identify and respond to the challenges posed by tax legislation and regulation
- Access to a wide array of cutting-edge tax publications from PricewaterhouseCoopers LLP
TANGIBLE PROPERTY REGULATIONS (Repair Regulations)
In November of 2015, the Internal Revenue Service (IRS) finally issued the
retail/restaurant repairs industry issue resolution (IIR) revenue procedure (Rev. Proc. 2015-56). These regulations are important because retailers have substantial "tangible property" in the form of improvements to their stores. The safe harbor allows retailers to utilize it for tax years 2014 and beyond.
RILA, its member companies, our PricewatershouseCoopers (PwC) consultants, and
NRF and their consultant negotiated a safe harbor directly with IRS
officials for nearly four years. This safe harbor enables retailers to
eliminate the substantial confusion about which costs of store remodels and
refreshes should be expensed and deducted immediately, or must be capitalized
and depreciated over time.
Under this safe harbor, retailers are now able to apply a percentage (75
percent) to a base dollar amount of expenditures. The resulting amount will be
considered deductible immediately while the remaining percentage (25 percent)
will be capitalized and depreciated over time.
The repair regulations are key to determining how expenditures made to refresh
or remodel stores should be expensed. Retailers have substantial tangible property
investment in the form of improvements to their stores – such as replacing
floor and ceiling tiles, updating hardware and displays, and repainting and
plastering walls. Because most refresh their stores every five to 10 years,
major retailers may refresh dozens if not hundreds of store locations each year
with expenditures that could easily run into the tens of millions of dollars.
The safe harbor for the retail industry is a direct result of years of
engagement and hard work by RILA member companies. The IRS would not have
issued this Rev. Proc. without our members’ direct involvement. RILA is
tremendously grateful for all its member companies which, throughout this
entire regulatory development process, provided comprehensive input and data,
engaged in numerous conference calls, and traveled to Washington, D.C. to
attend meetings directly with IRS officials. Your steadfast dedication,
invaluable expertise, and patience is extremely appreciated! Thank you very