A House bill allows store and restaurant owners to write-off remodeling costs over a shorter period.
A House bill approved last week includes provisions to extend tax breaks for store and restaurant owners looking to remodel.
The Energy and Tax Extenders Act of 2008 allows retailers who lease their stores to write off remodeling costs over 15 years. Similar benefits were included for both leased and owned restaurants.
The bill, which also includes a multi-billion dollar package of energy-related tax incentives, extends the 15-year depreciation period first approved in 2004 and set to expire at the end of the year. Previous tax laws required retailers to write off remodeling costs over 39 years.
According to the National Retail Federation, the shorter period will help boost the economy by encouraging more store and restaurant owners to re-invest in their businesses.
"In the current economic climate, some retailers look at remodeling as a way to revitalize a failing store, but the anticipated return has to pay for the cost involved," Steve Pfister, the trade group's senior vice president for government relations, said in a statement.
Typically, retailers remodel every five to seven years in order to maintain customer interest and compete with newer stores, Pfister said.
The bill is expected to be taken up by the Senate next week.