[Congressional Record (Bound Edition), Volume 153 (2007), Part 13]
[Extensions of Remarks]
[Pages 18070-18071]
[From the U.S. Government Publishing Office, www.gpo.gov]




                INTRODUCTION OF RETAIL DEPRECIATION BILL

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                          HON. RICHARD E. NEAL

                            of massachusetts

                    in the house of representatives

                        Thursday, June 28, 2007

  Mr. NEAL of Massachusetts. Madam Speaker, I rise today to introduce 
legislation to help our nation's 1.5 million retailers. The bill that I 
am filing today, along with my Committee colleagues Representatives 
Phil English, Artur Davis, and Sam Johnson, would provide a quicker 
cost recovery for improvements to retail-owned property.
  Already, retailers or other commercial entities that rent, rather 
than own their property can recover the costs of improvements over 15 
years. Owners of retail property, however, must write-off these same 
improvements to their property over 39 years. There is little reason 
for such a distinction; the wear and tear on the property is the same. 
In fact, studies by the Congressional Research Service, the Treasury 
Department, and other private economists have found that the current 
asset lives assigned to buildings and improvements are far too long.
  Many small retailers own their buildings and are unable to afford the 
space in the more desirable malls. One of my constituents, Dave Ratner 
of Dave's Soda and Pet City in Agawam, MA, testified before Congress 
earlier this year on this issue. Dave employs 86 people in western 
Massachusetts at his four locations. He competes with the major pet 
care chain stores, which often lease pricey space in the malls. Because 
their property is leased, it is eligible for the quicker cost recovery, 
providing a significant tax advantage over Dave's shops.
  Since half of retail space is owned and half is rented, Congress 
should try to create parity within this industry. Our retailers employ 
one in five American workers and generally must remodel their stores 
every five to seven years in order to keep up with customers' tastes 
and needs. These retail owners, the majority of

[[Page 18071]]

whom have less than five employees, are often all you see along Main 
Street in the small cities and especially in rural areas. Ownership 
signifies a long-term commitment to the community. We should at least 
level the playing field for these community-based businesses.
  We urge you to join us in supporting legislation to allow a quicker 
cost recovery for improvements to retail-owned property. It is one way 
to help retailers remain competitive and stay on Main Street.

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