Issues & Advocacy

Issue Brief

Restaurant Depreciation

Restaurants are high-traffic businesses, with about half of all adults reporting that they visit a restaurant or foodservice establishment on a typical day.

The heavy traffic takes a toll on a restaurant’s facilities.  Restaurant operators typically remodel, upgrade or renovate every six to eight years, according to National Restaurant Association research.

The NRA has long supported allowing restaurant operators to deduct the cost of restaurant-building improvements and new construction on a 15-year depreciation schedule, rather than 39.5 years. In late 2015 Congress passed and President Obama signed into law a measure that makes the 15-year schedule permanent.

Why it matters to Restaurants

Certainty about taxes encourages restaurant owners to invest more in their businesses. Restaurant construction boosts the economy, and the tax treatment of expansion and improvements is an important factor for owners as they consider expanding or making improvements.

Given the frequency of restaurant renovations and improvements, the 15-year schedule is much more in line with marketplace realities than the previous 39.5-year schedule. A 15-year tax-depreciation schedule also improves cash flow, which helps restaurant operators reinvest in their businesses and hire more employees.

Related documents

National Restaurant Association letter to Senate Working Group on Tax Reform, April 15, 2015