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Reps. Panetta, Walorski Introduce Bipartisan Restoring Investment in Improvements Act

March 26, 2019
Press Release
Helps spur renovations and investment in local restaurants, retailers

WASHINGTON, DC – Today, Congressman Jimmy Panetta (D-CA) and Congresswoman Jackie Walorski (R-IN) introduced the Restoring Investment in Improvements Act, H.R. 1869, bipartisan legislation that ensures restaurants and retailers are able to properly benefit from a tax provision meant to aid renovations and spur investment.

The 2017 tax law made significant changes to the federal tax code, including allowing businesses to immediately write off costs associated with improving facilities instead of having to write off those expenses over 15 years. An inadvertent drafting error required restaurants, retailers, and other leaseholders to instead write those expenses off over a much longer period of 39 years, resulting in cost-prohibitive renovation projects and stalled investments.  Reps. Panetta and Walorski’s bipartisan Restoring Investment in Improvements Act would ensure the full cost of store, office, or building improvements can be immediately expensed as was originally intended. The Joint Committee on Taxation has concluded that this legislation would have no impact on the federal budget deficit.

"The loss of immediate expensing has hurt many of our family-owned small businesses that are critical to the success of our Central Coast economies and communities," said Congressman Panetta.  "The Restoring Investment in Improvements Act fixes that problem, known as the “retail glitch,” by restoring the 15-year schedule for Qualified Improvement Property (QIP) and make these improvements eligible for immediate expensing as was originally intended.  Our bill will allow restaurants, retailers, and other businesses to make the improvements they need to keep their stores competitive and safe and plan for the future."

"Tax reform has helped businesses across the country invest, expand, and hire more workers, but investments in interior improvements were inadvertently excluded from some tax benefits," Congresswoman Walorski said. "The Restoring Investment in Improvements Act is a small but critical fix for our job creators, and technical corrections like this are a normal part of the process when Congress enacts major reforms. This bipartisan, commonsense bill will allow restaurants, retailers, and other small businesses to unlock the full benefits of tax reform and continue driving our nation’s economic growth."

Ted Balestreri, Chairman and CEO of The Sardine Factory Restaurant said, "We are excited to see Congressman Jimmy Panetta and his colleagues fighting for restaurant owners in California and across the country. A permanent correction restoring the appropriate tax treatment of our improvements will allow our restaurant operators, small and large, to support their employees and expand their businesses. This legislation will benefit restaurants and local economies throughout the country."

"The IAFC applauds Rep. Panetta for developing this bipartisan and cost-neutral legislation to correct the drafting error which limits the ability of property owners to invest in the safety of their buildings. Fire sprinklers are proven to decrease death rates in fires by up to 87%. This bill provides a crucial mechanism to make these life-savings systems more accessible to building owners across the United States," said Fire Chief Dan Eggleston, President and Chairman of the Board of Directors of the International Association of Fire Chiefs.

Original cosponsors of the legislation include Reps. Steven Horsford (D-NV), Congressman Mike Kelly (R-PA), Terri Sewell (D-AL), George Holding (R-NC), Susie Lee (D-NV), Andy Barr (R-KY), Joyce Beatty (D-OH), David McKinley (R-WV), Dina Titus (D-NV), Mark Amodei (R-NV), Lou Correa (D-CA), and Kenny Marchant (R-TX). A companion bill was also introduced in the Senate by Senators Pat Toomey (R-PA) and Doug Jones (D-AL).