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National Restaurant Association - NRA pushes for 15-year depreciation schedule

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NRA pushes for 15-year depreciation schedule

With more than 25 percent of U.S. Senators and Representatives now backing NRA-supported bills to enact a permanent 15-year tax-depreciation schedule for what restaurants spend to improve their buildings or build new stores, the National Restaurant Association is pushing aggressively for Congress to act on this issue when lawmakers act on other tax issues toward the end of this year.

Congress let the 15-year write-off schedule expire and revert to 39.5 years at the end of 2011. The NRA is working closely with lawmakers to push not only for a permanent 15-year schedule, but for a retroactive extension of the 15-year schedule back to Jan. 1, 2012.

The likeliest venue for action will be when Congress holds a lame-duck session after the Nov. 6 elections. Lawmakers face a full slate of tax issues during that session, including extension of the expiring 2001/2003 tax rates. Last month, the Senate Finance Committee adopted a package of "tax extenders" that include extension of the 15-year schedule retroactive to Jan. 1, 2012, and through 2013. However, the full Senate has not yet voted on that bill, nor has the House tax committee acted on it.

Thanks to hard work by NRA members, bills that would make permanent the shorter depreciation schedule for restaurant construction and improvements -- H.R. 1265 and S. 687 -- now have 112 House and 27 Senate cosponsors. Lead sponsors include Sens. Kent Conrad (D-N.D.) and John Cornyn (R-Texas), and H.R. 1265, by Reps. Jim Gerlach (R-Pa.) and Richard Neal (D-Mass.).

About one in three restaurant operators reported to the NRA earlier this year that they have put expansion and renovation projects on hold because of uncertainty over how the tax code will treat their spending. According to the NRA's estimates, if restaurants proceeded with these projects, the result would be $7 billion in direct construction spending by restaurants, and $23 billion overall economic impact as this construction spending ripples across other industries. NRA research indicates the average restaurant typically renovates every six to eight years to accommodate high wear-and-tear on restaurant buildings.

The NRA urges its members to make a final push for support for H.R. 1265 and S. 687 before Congress reconvenes later this year to deal with tax issues. The NRA's America's Restaurant Advocates program offers a sample e-mail restaurateurs can send to Congress explaining the importance of the 15-year tax depreciation schedule.

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