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 TrumpCould Donald Trump and Boris Johnson be this generation's Reagan-Thatcher? Merkel backs Democratic congresswomen over Trump How China's currency manipulation cheats America on trade 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 KingPoll: McConnell is most unpopular senator Senate panel advances Pentagon chief, Joint Chiefs chairman nominees Overnight Defense: Highlights from Defense pick's confirmation hearing | Esper spars with Warren over ethics | Sidesteps questions on Mattis vs. Trump | Trump says he won't sell F-35s to Turkey MORE (I-Maine), Joe ManchinJoseph (Joe) ManchinPoll: McConnell is most unpopular senator Dems open to killing filibuster in next Congress Trump nominees meet fiercest opposition from Warren, Sanders, Gillibrand MORE (D-W.Va.), Rob PortmanRobert (Rob) Jones PortmanFighting the opioid epidemic: Congress can't just pass laws, but must also push to enforce them The Hill's Morning Report - Presented by JUUL Labs - House to vote to condemn Trump tweet Rising number of GOP lawmakers criticize Trump remarks about minority Dems MORE (R-Ohio), Pat RobertsCharles (Pat) Patrick RobertsThe Hill's Morning Report - Trump seizes House impeachment vote to rally GOP Pompeo on Senate run: 'I always leave open the possibility that something will change' CNN's Cuomo spars with Kris Kobach over whether Trump's tweet was racist MORE (R-Kan.), Jeanne ShaheenCynthia (Jeanne) Jeanne ShaheenPoll: McConnell is most unpopular senator How to reduce Europe's dependence on Russian energy Epstein charges show Congress must act to protect children from abuse MORE (D-N.H.) and John ThuneJohn Randolph ThuneGOP rattled by Trump rally GOP wants commitment that Trump will sign budget deal Poll: McConnell is most unpopular senator 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.