SPONSORED:

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 ToomeyPhilly 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 Toomey on Trump vote: 'His betrayal of the Constitution' required conviction MORE (R-Pa.) and Doug Jones (D-Ala.) on Thursday introduced legislation to fix a provision in President TrumpDonald TrumpBiden to hold virtual bilateral meeting with Mexican president More than 300 charged in connection to Capitol riot Trump Jr.: There are 'plenty' of GOP incumbents who should be challenged 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.”

ADVERTISEMENT

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 KingBiden CIA pick pledges to confront China if confirmed, speak 'truth to power' Top cops deflect blame over Capitol attack Koch-backed group launches ads urging lawmakers to reject COVID-19 relief bill MORE (I-Maine), Joe ManchinJoseph (Joe) ManchinHouse Democrats pass sweeping .9T COVID-19 relief bill with minimum wage hike Democrats scramble to rescue minimum wage hike White House noncommittal on 'Plan B' push to add wage increase to relief bill MORE (D-W.Va.), Rob PortmanRobert (Rob) Jones PortmanGrassley to vote against Tanden nomination Murkowski undecided on Tanden as nomination in limbo Biden signs supply chain order after 'positive' meeting with lawmakers MORE (R-Ohio), Pat RobertsCharles (Pat) Patrick RobertsPat Roberts joins lobbying firm weeks after Senate retirement Senate swears-in six new lawmakers as 117th Congress convenes Window quickly closing for big coronavirus deal MORE (R-Kan.), Jeanne ShaheenCynthia (Jeanne) Jeanne ShaheenSenators press Treasury to prioritize Tubman redesign Can Palestine matter again? Senate signals broad support for more targeted coronavirus relief checks MORE (D-N.H.) and John ThuneJohn Randolph ThuneGraham: Trump will 'be helpful' to all Senate GOP incumbents Cruz hires Trump campaign press aide as communications director Senate GOP works to avoid having '22 war with Trump 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.