Impact of the repair regulations on the Retail Industry

Retail & Consumer Products Quickbrief

On December 23, 2011, Treasury published regulations (the "repair regulations" or "temporary regulations") that create new rules related to the acquisition, production, or improvement of tangible property. These rules are meant to help retailers and other affected companies better distinguish between currently deductible repair and maintenance expenses under section 162(a) and expenditures that must be capitalized under section 263(a). Beginning in 2012, all retailers will need to evaluate the impact of these new rules on their businesses. Upon doing so, most retailers will likely discover that they need to change their method(s) of accounting associated with repairs and maintenance to conform to the new rules.

Return to Tax research and insights
Retail & Consumer Products Quickbrief archive