Senators offer bipartisan bill to fix 'retail glitch' in GOP tax law

Senators offer bipartisan bill to fix 'retail glitch' in GOP tax law
© Anna Moneymaker

Sens. Pat ToomeyPatrick (Pat) Joseph ToomeyNSA improperly collected US phone records in October, new documents show Overnight Defense: Pick for South Korean envoy splits with Trump on nuclear threat | McCain blasts move to suspend Korean military exercises | White House defends Trump salute of North Korean general WH backpedals on Trump's 'due process' remark on guns MORE (R-Pa.) and Doug Jones (D-Ala.) on Thursday introduced legislation to fix a provision in President TrumpDonald John TrumpTrump conversation with foreign leader part of complaint that led to standoff between intel chief, Congress: report Pelosi: Lewandowski should have been held in contempt 'right then and there' Trump to withdraw FEMA chief nominee: report MORE’s 2017 tax-cut law that adversely affects the retail and restaurant industries.

“The federal tax code should not make it more difficult for a restauranteur or a retailer,” Toomey said in a statement. “Capital invested in a company should be fully deductible at the time of the investment.”

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Before the law's enactment, retail stores and restaurants could write off the costs of their renovations over a span of 15 years. The authors of the 2017 tax legislation intended for the statute to allow businesses to write off the full costs of those renovations in the year they were made.

But as a result of what's been called a drafting error, or the "retail glitch," stores and restaurants now have to write off the costs of renovations over the course of 39 years.

The measure offered by Toomey and Jones would allow businesses to immediately deduct the full cost of renovations. The fix would apply retroactively, as if it had been included in the 2017 tax law, and the Joint Committee on Taxation has said the change would not have an impact on federal revenue.

“Making sure our local small businesses can invest in themselves is critical for the economic success of Alabama’s communities," Jones said in a statement. "That’s why this bipartisan legislation is so important: to make sure the tax code works as intended, and restaurants, retailers, and other businesses can make the improvements they need to make their stores competitive, vibrant, and safe.”

The legislation is co-sponsored by Sens. Angus KingAngus Stanley KingOvernight Defense: Dems grill Trump Army, Air Force picks | House chair subpoenas Trump Afghanistan negotiator | Trump officials release military aid to Ukraine Democrats grill Army, Air Force nominees on military funding for border wall Bipartisan panel to issue recommendations for defending US against cyberattacks early next year MORE (I-Maine), Joe ManchinJoseph (Joe) ManchinGOP signals unease with Barr's gun plan READ: Trump administration memo on background checks NRA says Trump administration memo a 'non-starter' MORE (D-W.Va.), Rob PortmanRobert (Rob) Jones PortmanCost for last three government shutdowns estimated at billion The Hill's Morning Report - Trump takes 2020 roadshow to New Mexico The 13 Republicans needed to pass gun-control legislation MORE (R-Ohio), Pat RobertsCharles (Pat) Patrick RobertsInternal poll shows Kobach trailing Democrat in Kansas Senate race Here are the lawmakers who aren't seeking reelection in 2020 Hillicon Valley: Lawmakers ramp up Silicon Valley antitrust probe | Treasury sanctions North Korean cyber groups | Thiel to host Kobach fundraiser MORE (R-Kan.), Jeanne ShaheenCynthia (Jeanne) Jeanne ShaheenMeghan McCain: Lewandowski Senate run would be 'an absolutely ridiculous crap show' Super PAC targets Lewandowski with ad amid Senate speculation Lewandowski 'very, very close to announcing' decision on Senate run MORE (D-N.H.) and John ThuneJohn Randolph ThuneHillicon Valley: Zuckerberg to meet with lawmakers | Big tech defends efforts against online extremism | Trump attends secretive Silicon Valley fundraiser | Omar urges Twitter to take action against Trump tweet NRA says Trump administration memo a 'non-starter' Trump administration floats background check proposal to Senate GOP MORE (R-S.D.). It is also backed by a number of industry groups, including the Alliance to Save Energy, the National Restaurant Association and the National Retail Federation.

While the provision is a priority for a number of lawmakers and businesses, it’s unclear whether the bill will make it to President Trump's desk.

The House in December passed a year-end tax package, with a fix to the error, when Republicans controlled the chamber. That legislation wasn’t taken up by the Senate before the end of the 115th Congress, meaning the bill expired.

Many congressional Democrats have said they don’t want to make technical corrections to Trump’s tax law unless those changes include more substantive changes.

Updated at 11:48 a.m.