WASHINGTON — Retailers are applauding the broad tax bill President Obama is expected to sign because in addition to the added disposable income it will give consumers, it provides a package of business tax-cut provisions that retailers and apparel companies say will help their businesses.
The House passed the broad tax bill on a vote of 277-148 late Thursday night. The $858 billion bill also includes an extension of jobless benefits, an extension of the inheritance tax at a lower rate and a cut in workers’ social security payroll tax rate.
“With the President’s signature, this package will put money back in the pockets of consumers and end the uncertainty many job providers were facing regarding their tax liabilities in 2011, said Katherine Lugar, executive vice president for public affairs at the Retail Industry Leaders Association. “This is good news for retailers heading into the New Year.”
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Matthew Shay, president chief executive officer of the National Retail Federation, said a provision that would extend a 15-year depreciation life for retail, restaurant and leasehold improvements for two years “will create jobs in retailing by helping merchants revitalize older stores and keep them open while also creating jobs in construction.”
A second provision that will offer an immediate 100 percent write off of capital investments in business for a year “will allow retailers to make important investments in their stores, also leading to more job creation in the economy,” Shay said.
“There are a number of business-relate tax measure that people use to reduce costs and stay competitive,” said Stephen Lamar, executive vice president of the American Apparel & Footwear Association. “At a time when all of these other costs are going up, to at least be able to enter the holiday season and know the tax burden is not going up at the same time, offers a measure of relieve and is going to help people being the new year with a lot more confidence and optimism.”
The bill also extends the estate tax and sets the top rate at 35 percent an exempts a family’s estate up to $10 million and an individual’s estate up to $5 million.
The National Cotton Council said it would support such a compromise over the alternative of no Congressional action, which would have reinstated the tax next year with a $1 million exemption and a top rate of 55 percent.