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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 ToomeySasse rebuked by Nebraska Republican Party over impeachment vote Philly GOP commissioner on censures: 'I would suggest they censure Republican elected officials who are lying' Toomey censured by several Pennsylvania county GOP committees over impeachment vote MORE (R-Pa.) and Doug Jones (D-Ala.) on Thursday introduced legislation to fix a provision in President TrumpDonald TrumpVirginia GOP gubernatorial nominee acknowledges Biden was 'legitimately' elected Biden meets with DACA recipients on immigration reform Overnight Health Care: States begin lifting mask mandates after new CDC guidance | Walmart, Trader Joe's will no longer require customers to wear masks | CDC finds Pfizer, Moderna vaccines 94 percent effective in health workers 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 KingDC statehood bill picks up Senate holdout Senate panel deadlocks in vote on sweeping elections bill Senate descends into hours-long fight over elections bill MORE (I-Maine), Joe ManchinJoe ManchinFormer OMB pick Neera Tanden to serve as senior adviser to Biden The Hill's Morning Report - Presented by Facebook - Masks off: CDC greenlights return to normal for vaccinated Americans Jill Biden, Jennifer Garner go mask-free on vaccine-promoting West Virginia trip MORE (D-W.Va.), Rob PortmanRobert (Rob) Jones PortmanCarper urges Biden to nominate ambassadors amid influx at border Fudge violated the Hatch Act, watchdog finds House conservatives take aim at Schumer-led bipartisan China bill MORE (R-Ohio), Pat RobertsCharles (Pat) Patrick RobertsSenate GOP faces retirement brain drain Roy Blunt won't run for Senate seat in 2022 Lobbying world MORE (R-Kan.), Jeanne ShaheenCynthia (Jeanne) Jeanne ShaheenArmy secretary nominee concerned about 'unreasonable or unhelpful demands' on National Guard DC statehood bill picks up Senate holdout US is leaving, but Afghan women to fight on for freedoms MORE (D-N.H.) and John ThuneJohn Randolph ThuneGOP split on counteroffer to Biden's spending Senate GOP dismayed by vote to boot Cheney Top Democrat: FCC actions are a 'potential setback' to autonomous vehicles 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.