Arlington, VA- The National Grocers Association (NGA), the trade association representing the independent supermarket industry released the following statement from NGA President and CEO Greg Ferrara in response to the U.S. House of Representatives passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which contains an important technical correction to fix the retail glitch – a drafting error in the Tax Cuts and Jobs Act (TCJA) of 2017 that had unintended consequences for retailers:
“As independent grocers are stepping up to the frontlines to serve their communities during the current public health crisis, NGA appreciates the bipartisan work done by Congress to resolve the retail glitch and provide the needed certainty to allow for grocers to reinvest in their stores and drive economic growth in their local communities.”
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. NGA sent a letter to Congressional leadership in early March, urging lawmakers to include a legislative fix for the retail glitch in any economic stimulus measures during the coronavirus pandemic. To view the letter, click HERE.