NFIB

Restaurant Property Tax Incentive for Leasehold Improvements

Under current law, restaurant owners have benefited from restaurant leasehold tax incentives that allowed them to shorten the depreciable time period allowable for qualified leasehold improvement property placed in service before Jan. 1, 2006. Qualified leasehold improvement property is any improvement to the interior portion of the building that is nonresidential real property. The improvement must be made to the portion of the building that is under a lease. There are some restrictions to the qualifications. Current law allows restaurant owners to take advantage of a 15-year depreciable recovery period for this property. Because restaurant leasehold tax incentives expired on Jan. 1, 2006, NFIB is urging Congress to extend the property placed in service date to Dec. 31, 2009. In addition, NFIB will work for permanent extension of this tax incentive. A tax extenders bill containing this two-year extension is pending in Congress.