Federal tax provisions for "small" retailers help big retailers more
According to Chain Store Age ("House approves bill to help retailers with remodeling costs") the House passed a bill authorizing a 15-year depreciation period for store renovations, instead of the 39 year period required in current law.
Mayor Michael Nutter promoting Small Business Saturday in the Kensington neighborhood of Philadelphia. Flickr photo by New Kensington Community Development Corporation.
Yet, retail stores have to be refreshed every 5-7 years anyway.
It would make sense to have a depreciation period more in line with the expected useful life of the expenditure--15 years is 1/2 to 2/3 too long a period.
Similarly, the bill approves "bonus depreciation," allowing the claiming of a deduction of half of the total costs in the first year, but only for "leased stores."
That puts small store proprietors who own their properties at a comparative disadvantage to chain stores. Along with many other tax and legal stratagems (for example, big companies put their intellectual property, like logos, in a separate corporation and require individual stores to pay royalty fees for use of the logos, depressing reportable income).