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 TrumpTrump rips Dems' demands, impeachment talk: 'Witch Hunt continues!' Nevada Senate passes bill that would give Electoral College votes to winner of national popular vote The Hill's Morning Report - Pelosi remains firm despite new impeachment push 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 Stanley KingSenate panel approves Interior nominee over objections from Democrats Trump, Europe increasingly at odds on Iran The Hill's 12:30 Report: Dems raise stakes with talk of 'constitutional crisis' MORE (I-Maine), Joe ManchinJoseph (Joe) ManchinSenate panel approves Interior nominee over objections from Democrats Labor head warns of 'frightening uptick' in black lung disease among miners Labor leader: Trump has stopped erosion of coal jobs MORE (D-W.Va.), Rob PortmanRobert (Rob) Jones PortmanThe Hill's Morning Report - White House, Congress: Urgency of now around budget WANTED: A Republican with courage Companies warn Trump trade war is about to hit consumers MORE (R-Ohio), Pat RobertsCharles (Pat) Patrick RobertsWomen's civil rights are not a state issue The Hill's 12:30 Report: Tough questions await Trump immigration plan Pat Robertson: Alabama 'has gone too far' with 'extreme' abortion law MORE (R-Kan.), Jeanne ShaheenCynthia (Jeanne) Jeanne ShaheenTrump, Europe increasingly at odds on Iran Foreign Relations senators demand Iran briefing The Hill's Morning Report - Presented by Pass USMCA Coalition - After GOP infighting, Trump Jr. agrees to testify again MORE (D-N.H.) and John ThuneJohn Randolph ThuneOn The Money: Congress, White House aim to include debt limit increase in spending deal | McConnell optimistic budget deal near | Carson defends HUD eviction plan | Senate votes to undo tax hike on Gold Star families Congress, White House indicate debt limit increase will be part of spending deal Hillicon Valley: Trump takes flak for not joining anti-extremism pact | Phone carriers largely end sharing of location data | Huawei pushes back on ban | Florida lawmakers demand to learn counties hacked by Russians | Feds bust 0M cybercrime group 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.