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Thread: Retail sales surge as companies beg Congress to fix tax law error

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    Retail sales surge as companies beg Congress to fix tax law error

    Retail sales surged in May to the highest levels in months, the Commerce Department said Thursday, a sign of growing economic optimism spurred by GOP-led tax cuts and low unemployment.

    May retail sales rose 0.8 percent from the prior month to $502 billion, according to data from the U.S. Census Bureau. The increase is the largest in months and also amounts to a 5.9 percent year-over-year bump, even amid rising gas prices.


    Restaurant sales, for example, grew 1.3 percent in May after dropping in April. The climbing revenue will help retailers across a slew of sectors seeking to bolster their e-commerce business to compete with Amazon’s growing clout. Plans by companies like Target to drive strong in-store sales at the same time, with steps such as upgrading older locations, might be affected by drafting errors in the recently enacted tax law, however.






    Lawmakers intended to allow businesses to deduct 100 percent of the cost of capital expenditures made in 2018, a provision that caused a spike in investments into U.S. businesses. But the legislation left out critical wording and instead, retailers are only allowed to write off 2.5 percent of any store improvement costs this year. The remaining 97.5 percent would be deducted over the next 38 years.


    “This very large difference in the after-tax cost of making improvements is causing a delay in some store and restaurant remodeling projects, as well as causing some retailers to decline opportunities to purchase or lease new store locations that would require substantial improvements,” a group of more than 100 retailers, including Dick’s Sporting Goods, Best Buy and Kroger, wrote to top lawmakers on the Senate and House tax-writing committees.


    "These decisions not only deny communities the jobs associated with substantial construction projects, but also deny our communities the opportunity to bring new, permanent jobs to an otherwise abandoned store or to revitalize a declining mall," the merchants said.


    https://www.washingtonexaminer.com/b...-tax-law-error
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    Some more good economic news.
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