Recovery period for depreciation of certain improvements to retail space

(a)

15-Year recovery period

Subparagraph (E) of section 168(e)(3) of the Internal Revenue Code of 1986 (relating to 15-year property) is amended by striking and at the end of clause (vii), by striking the period at the end of clause (viii) and inserting , and, and by adding at the end the following new clause:

(ix)any qualified retail improvement property.

(b)

Qualified retail improvement property

Subsection (e) of section 168 of such Code is amended by adding at the end the following new paragraph:

(8)

Qualified retail improvement property

(A)

In general

The term qualified retail improvement property means any improvement to an interior portion of a building which is nonresidential real property if— (i)such portion is open to the general public and is used in the trade or business of selling tangible personal property or services to the general public; and (ii)such improvement is placed in service more than 3 years after the date the building was first placed in service. (B)

Certain improvements not included

Such term shall not include any improvement for which the expenditure is attributable to— (i)the enlargement of the building, (ii)any elevator or escalator, or (iii)the internal structural framework of the building.

(c)

Requirement to use straight line method

Paragraph (3) of section 168(b) of such Code is amended by adding at the end the following new subparagraph:

(I)Qualified retail improvement property described in subsection (e)(8).

(d)

Alternative system

The table contained in section 168(g)(3)(B) of such Code is amended by inserting after the item relating to subparagraph (E)(viii) the following new item:

(E)(ix)39

(e)

Effective date

The amendments made by this section shall apply to qualified retail improvement property placed in service after the date of the enactment of this Act.