Four missing words in the new tax law mean fewer aging restaurants will get renovated this year, the Wall Street Journal reported. A tax-law goof put restaurants in a pickle, and some companies are postponing some of those projects as the retail, restaurant and commercial-real-estate industries push Congress to correct an inadvertent omission. As intended, the new tax law would have let restaurants and other companies deduct their renovation costs immediately, rather than over many years, providing an incentive to do such work. President Donald Trump recently praised immediate write-offs for these and other capital investments as “maybe the most important element” of the tax law. Instead, as written, restaurants and other companies must depreciate building-renovation costs over 39 years — a less favorable rule than existed before Congress changed the law. Under the prior law, a company making a $100 renovation could deduct the costs over 15 years, for a present-value equivalent of $84.38, according to a Tax Foundation analysis. The goal of the new law was to allow a full and immediate $100 deduction. Instead, with the deductions stretched out over 39 years, that same company can now deduct only $42.12 in present-value terms. Companies such as Stage Stores Inc., Texas Roadhouse Inc. and Publix Super Markets Inc. have all signed a letter urging Congress to act, warning of delays in construction projects rippling through local economies. But the change would likely require 60 votes in the Senate, where Republicans have just a 51-49 majority. The process of fixing this flaw and other technical problems in the law is moving slowly, weighed down in part by lingering partisan bitterness over the crafting of the tax law, which passed without a single Democratic vote.
