Congressional Bills Speed Up Depreciation Schedule For Restaurant Improvements, New Construction

The National Restaurant Association is applauding bipartisan bills introduced in Congress March 30 which would make permanent a 15-year tax depreciation schedule for restaurant improvements and new construction, leasehold improvements and retail improvements.

Under S. 687 and H.R. 1265, restaurant operators, their landlords and other commercial-property owners could write off the cost of improvements to property, as well as the cost of new construction for restaurants, over a span of 15 years, rather than 39. The current 15-year schedule for these investments is set to expire at the end of the year.

The quicker depreciation schedules would apply to new restaurant construction as well as investments in property such as interior walls, wiring, partitions, plumbing, and energy-efficient heating and cooling systems in restaurants, offices and other commercial space.

The 39-year depreciation schedule does not reflect economic realities, according to Scott DeFife, NRA exec. v.p.-policy and government affairs. "This measure recognizes the realities of how often restaurants must renovate, and would provide much-needed cash flow to help small businesses reinvest in their operations.”

According to the NRA, restaurants in the United States serve more than 130 million guests a day at nearly one million establishments, and renovate every six to eight years, on average. Restaurants spent more than $6.2 billion on construction of new restaurant buildings in `09, creating 174,000 jobs in the economy, the NRA estimates.