National Grocers Association Applauds Introduction of Legislation to Fix the “Retail Glitch” Tax Error

March 26, 2019

 Arlington, Virginia- The National Grocers Association (NGA) today applauded the introduction of the “Restoring Investment in Improvements Act,” a bipartisan bill that will resolve the “retail glitch,” a drafting error in the Tax Cuts and Jobs Act (TCJA). The bill was introduced by Representatives Jimmy Panetta (D-CA-20) and Jackie Walorski (R-IN-2).

The TCJA included a provision providing businesses with a 100 percent bonus depreciation to be used to write off the full costs of short-lived investments immediately. Congress intended to help retailers invest in their businesses with the inclusion of this provision. However, due to a drafting error, some categories of business investment, most notably qualified improvement property, or “QIP,” were excluded from being 100 percent eligible for bonus depreciation. Due to this error, retailers making investments to improve their stores now face a more restrictive cost recovery period that is twice than under the prior law.

“The retail glitch has created uncertainty for independent grocers across the country and has inadvertently stifled their ability to upgrade and reinvest in their stores,” said Greg Ferrara, EVP of NGA. “NGA appreciates the bipartisan work done by Representatives Panetta and Walorski to resolve this issue in a timely manner so that grocers can continue to expand and drive economic growth in their local communities.”

NGA would also like to thank the following cosponsors: Representatives Steven Horsford (D-NV), Terri Sewell (D-AL), George Holding (R-NC), Mike Kelly (R-PA), Susie Lee (D-NV), Andy Barr (R-KY), Joyce Beatty (D-OH), Dina Titus (D-NV), David McKinley (R-WV), Mark Amodei (R-NV), Lou Correa (D-CA), and Kenny Marchant (R-TX).

A companion bill was also introduced in the Senate by Senators Pat Toomey (R-PA) and Doug Jones (D-AL).

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