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NRA responds to restaurant depreciation legislation
September 20, 2007
WASHINGTON, D.C. — The National Restaurant Association has praised the introduction of a House bill aiming to address the tax code's unfairness toward restaurants, the association announced.
The bill would make permanent the accelerated depreciation schedule of 15 years for both new building construction and improvements for restaurants in the United States. Representatives Kendrick Meek, D-Fla., and Pat Tiberi, R-Ohio, are the lead cosponsors of the bill.
"The nation's 935,000 restaurant locations will serve over 70 billion meals and have an overall economic impact of more than $1.3 trillion in 2007," said Peter Kilgore, acting interim president and chief executive officer of the Association. "By allowing restaurateurs to deduct the cost of new construction and renovations on a shorter schedule, this legislation will help restaurateurs to grow their businesses and create more jobs."
Under current tax laws, owners of most commercial buildings — restaurants included — depreciate the building's original cost, plus the cost of subsequent building renovations and improvements, over 39 years. Recognizing that some businesses suffer particularly heavy daily wear and tear, Congress has sped up the depreciation schedule for certain businesses, but not for restaurants.
"In order to compete, restaurants need to upgrade their facilities often. It makes no sense to force them to use a 39-year depreciation schedule when they need to improve their property more often to stay in business and serve their customers," Meek said.
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