May 13, 2019

Last week, IFDA members went to Capitol Hill during the Washington Insight Conference to speak directly to lawmakers and provide insight into how the foodservice distribution industry drives the U.S. economy. The strongest organizations in Washington are those that can leverage their grassroots strengths to connect directly with lawmakers. Distributors have tremendous stories to tell about your people, your customers and the work you do in the community. This week was an opportunity both to tell these stories and to ask lawmakers to help be a part of the solution for critical industry issues including:
 

The DRIVE-Safe Act

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Senator Todd Young (R-Indiana), one of the Co-Sponsors of the DRIVE-Safe Act,  poses with Abigail Olson, a 19 year old who recieved her CDL but was unable to get a job due to the current intersate restrictions.
The country is facing a massive truck driver shortage that’s increasing the costs of consumer goods and hurting the economy. As the need for freight transportation grows, estimates show trucking companies will need to hire an additional 890,000 drivers over the next decade. According to an industry analysis by DAT Solutions, just one truck was available for every 12 loads needing to be shipped at the start of 2018, which is the lowest ratio since 2005. 

On February 26, bipartisan lawmakers in the Senate and House today introduced legislation to address the urgent shortage of truck drivers affecting the movement and cost of our nation’s commerce.

The DRIVE-Safe Act is critical legislation that addresses the massive driver shortage affecting the movement of commerce in our country by promoting opportunity and enhanced safety training for emerging members of this growing workforce. H.R. 1374 and S. 569 address the massive truck driver shortage, increase safety, and provide young adults with well-paying careers. Learn more at www.drivesafeact.com.

 

Depreciation

Due to a drafting error in the Tax Cuts and Jobs Act (TCJA), restaurants and retail establishments are not eligible for 100% expensing of interior improvements made to their locations. This was one of the key elements of the TCJA which expanded bonus depreciation to 100% in order to encourage business investment. Unfortunately, instead of including these types of investments in the bonus depreciation eligibility the final legislation actually worsened the tax situation for such improvements by requiring that they be written off over time periods as long as 39 years.

Bipartisan legislation enacted in 2015 had allowed restaurants and other retail establishment to operate on a 15 year depreciation schedule for building improvements which came with a 50% bonus depreciation schedule. The TCJA created a new depreciation category called “qualified improvement property” for these types of investments. Yet the final legislation neglected to include this new category of improvements in the 15 year recovery period and as a result they reverted to a period of 39 years. The law only allows 100% bonus depreciation for investments with a recovery period of 20 years or less.

The Tax Cuts and Jobs Act was meant to encourage investment to create jobs and help grow the economy. The drafting error has placed restaurants and retail establishments in a disadvantaged tax position that has the opposite effect.

Bipartisan legislation, S. 803 and HR 1869, has been introduced in both the House and Senate to restore the 15 Year Depreciation Period and Make Qualified Improvement Property Eligible For 100% Expensing. The Restoring Investments in Improvements Act would restore the 15 year depreciation period and make qualified improvement property eligible for 100% expensing.

For more information on IFDA's advocacy efforts, visit https://www.ifdaonline.org/issues-advocacy.