Washington, DC, December 4, 2006--The National Retail Federation today urged Congress to pass a long-overdue tax extenders bill that would reauthorize a series of key tax provisions that expired at the end of 2005.
“Retailers have acted in reliance on the expectation that Congress would enact legislation to retroactively extend these provisions,” NRF Senior Vice President for Government Relations Steve Pfister said. “It is imperative that Congress act now to provide a seamless extension of these important tax provisions relied upon by businesses across the nation.”
Pfister’s comments came in a letter to the Republican and Democratic leadership of the House and Senate along with the chairmen and ranking members of the Senate Finance Committee and the House Ways and Means Committee.
NRF asked lawmakers to retroactively extend the Work Opportunity Tax Credit, the Welfare to Work Tax Credit, the 15-year depreciation period for improvements to leased stores, and individual taxpayers’ ability to deduct state and local sales tax on their federal income tax returns. All four provisions expired at the end of 2005 and have been in limbo since, making tax planning difficult. Efforts to extend them have been unsuccessful the past several months despite widespread support in Congress.
Pfister said passage of the extenders bill is urgent because Congress is wrapping up its lame duck session before adjourning for the remainder of the year. Extension of the WOTC/WWTC provisions are particularly important because retailers have continued hiring eligible workers in the expectation that the programs would be reauthorized and that retailers would receive the associated tax credits.
“Further delay in extension of these programs will have a chilling effect on targeted hiring activities that Congress may hope to encourage in the future,” Pfister said. “Failure to extend these programs would impose a retroactive tax increase on employers who have relied on congressional promises that the programs would be extended.”
Pfister also asked that Congress “level the playing field between retailers” by applying the 15-year depreciation life for building improvements to stores that are owned as well as those that are leased. The expired provision only applied to leased stores, leaving companies and individuals who own their buildings at a disadvantage.
