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 ToomeyOvernight 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 Top GOP candidate drops out of Ohio Senate race MORE (R-Pa.) and Doug Jones (D-Ala.) on Thursday introduced legislation to fix a provision in President TrumpDonald John TrumpHow to stand out in the crowd: Kirsten Gillibrand needs to find her niche Countdown clock is on for Mueller conclusions Omar: White supremacist attacks are rising because Trump publicly says 'Islam hates us' 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: Senate rejects border emergency in rebuke to Trump | Acting Pentagon chief grilled on wall funding | Warren confronts chief over war fund budget Shanahan grilled on Pentagon's border wall funding Senators offer bipartisan bill to fix 'retail glitch' in GOP tax law MORE (I-Maine), Joe ManchinJoseph (Joe) ManchinRomney helps GOP look for new path on climate change Manchin says he won't support LGBTQ protection bill as written Senators offer bipartisan bill to fix 'retail glitch' in GOP tax law MORE (D-W.Va.), Rob PortmanRobert (Rob) Jones PortmanTrump faces political risks in fight over GM plant GOP moves to rein in president's emergency powers The 25 Republicans who defied Trump on emergency declaration MORE (R-Ohio), Pat RobertsCharles (Pat) Patrick RobertsPompeo jokes he'll be secretary of State until Trump 'tweets me out of office' Senators offer bipartisan bill to fix 'retail glitch' in GOP tax law Kansas Senate race splits wide open without Pompeo MORE (R-Kan.), Jeanne ShaheenCynthia (Jeanne) Jeanne ShaheenSenate Dems petition Saudi king to release dissidents, US citizen Senators offer bipartisan bill to fix 'retail glitch' in GOP tax law Overnight Energy: EPA moves to raise ethanol levels in gasoline | Dems look to counter White House climate council | Zinke cleared of allegations tied to special election MORE (D-N.H.) and John ThuneJohn Randolph ThuneCongress should take action to stop unfair taxation of the digital economy The fear of colorectal cancer as a springboard for change Senators offer bipartisan bill to fix 'retail glitch' in GOP tax law 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.