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WASHINGTON, D.C. — The National Restaurant Association today applauded the House of Representatives for its passage of H.R. 4520, The American Jobs Creation Act of 2004.
According to a news release, included in the bill is a provision to accelerate the depreciation schedule on improvements to restaurant properties from the current 39.5 to 15 years. This legislation will help generate additional cash flow for restaurants.
"The current 39-year depreciation schedule is unrealistic and punitive to restaurants since many are renovated more frequently than the average commercial business due to higher-volume consumer traffic," said NRA President and Chief Executive Officer Steven C. Anderson. "This legislation will help enhance that impact by reducing the depreciation schedule on improvements made to restaurants."
Restaurant buildings are specialized, single-purposed structures, unlike other non-residential properties. The industry-specific design and construction requirements restrict their use to the restaurant industry. For example, restaurants must install a firewall between the kitchen and dining room and operate for longer hours than the average business. This intense usage causes a rapid deterioration in a restaurant building's systems, from its entrances and lobbies to its flooring, restrooms and interior walls.
"While we commend the House of Representatives for taking this important first step, we continue to urge that future legislation on restaurant depreciation include new construction in addition to building improvements," said Anderson. "By allowing restaurateurs to deduct the cost of renovations and the construction of new businesses on a shorter schedule, many more will be in a position to grow their businesses and continue to create more jobs."
The U.S. Senate is expected to vote on final passage of the bill over the weekend.
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