The National Grocers Association supports the “Accelerate Long-Term Investment Growth Now (ALIGN) Act,” introduced yesterday by Senator Pat Toomey (R-PA) to make permanent an important provision in the Tax Cuts and Jobs Act (TCJA) allowing for full and immediate expensing of certain properties, which is set to phase down after 2022. Full and immediate expensing significantly enhances independent grocers’ ability to make important investments in their stores, which spurs investment in the local communities they serve. In addition to creating permanency for full and immediate expensing, Senator Toomey’s legislation also seeks to add qualified improvement property (QIP), or interior remodels to stores, to the types of property eligible for full and immediate expensing. QIP was inadvertently omitted from the expensing provision in the TCJA, resulting in grocers having to expense interior store improvements over 39.5 years instead of immediately as Congress intended.
“Before the TCJA, QIP qualified for a 15-year recovery period. But due to an unintentional drafting error, grocers are in a worse position to make store improvements than before the TCJA took effect,” said Molly Pfaffenroth, director of government relations at NGA. “It is critical that Congress works together to fix the “retail glitch” and make QIP eligible for full and immediate expensing. Permanency for full and immediate expensing and fixing QIP will spark investment in family-owned grocery stores, which are the cornerstones of many communities across the nation in urban and rural areas.”