Rep. Kelly Re-Introduces Restaurant and Retail Jobs and Growth Act
Senate companion bill introduced by Sen. Bob Casey (D-PA)
WASHINGTON — U.S. Representative Mike Kelly (R-PA) – a member of the House Ways and Means Committee – issued the following statement today after introducing H.R. 765, the Restaurant and Retail Jobs and Growth Act, in the House of Representatives with co-sponsor Rep. Richard Neal (D-MA). U.S. Senators Bob Casey (D-PA) and John Cornyn (R-TX) authored and introduced the companion legislation in the U.S. Senate. Rep. Kelly previously introduced this bill in the 113th Congress on March, 13, 2014.
“The Restaurant and Retail Jobs and Growth Act is a commonsense, bipartisan piece of legislation that will give tens of thousands of small businesses the tax certainty they need to invest, expand, and put more Americans back to work.
“Restaurants have long been an extraordinary source of private sector job creation for America, with 10 percent of our country’s entire workforce based in the foodservice industry. In Pennsylvania alone, restaurants employ more than a half-million people, including 20,000 hardworking men and women in the Third District.
“When the nation’s diners, pubs, taverns, and eateries succeed, so do their surrounding communities. Granting long-term tax stability to these vital enterprises will lead to new jobs and stronger economic growth from coast to coast.”
Dan Wilson, CFO of Eat’n Park Hospitality Group:
“We fully support the idea of a permanent 15-year depreciation schedule for the restaurant industry and we thank Congressman Kelly’s leadership on this issue. In our business, because of the wear and tear a public restaurant incurs, we will be out of business very quickly if we aren’t continually refreshing and reinvesting in our businesses. A 39-year depreciation schedule in the restaurant industry simply is not aligned with real world spending practices.”
NOTE: The Restaurant and Retail Jobs and Growth Act would make permanent the 15-year depreciation schedule for leasehold improvements, restaurant improvements and new construction and retail improvements. These types of business must constantly make improvements to keep up with structural and cosmetic wear and tear caused by customers and employees. In the restaurant industry alone, for example, more than 130 million customers patronize restaurant building structures each day. Unfortunately, the 15-year depreciation schedule for these properties is temporary and must be frequently renewed. Most recently, H.R. 5771, the so-called “tax extenders” legislation that passed last Congress, extended these provisions through December 31, 2014.
An important principle of the tax code is that the costs of assets are allocated over the period in which they are used. Assets with longer expected lives are depreciated over a longer period of time, while assets with shorter lives are depreciated over a shorter period of time. As a reflection of this principle, the Congress has long held that leasehold improvements, restaurant improvements and new construction and retail improvements should be depreciated over 15 years rather than the 39-year recovery period that would otherwise apply to nonresidential real property.
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