The LIFO Coalition Commends Preservation of Accounting Method in GOP Tax Blueprint
June 27, 2016
The LIFO Coalition, a group of more than 120 organizations including trade associations representing manufacturing, wholesale distribution, and retail industries, as well as companies of every size and industry sector that employ the “last in, first out” (LIFO) accounting method, today commented on the provision to preserve LIFO in a tax code reform blueprint produced by Republicans in the House of Representatives.
“The LIFO Coalition is pleased the GOP’s tax blueprint retains the use of this important accounting method for the countless businesses and industries that rely on it,” said Jade West, executive secretariat of The LIFO Coalition. “The Coalition commends Republicans for their foresight in preserving LIFO as it continues to serve as an invaluable tool for valuing inventory.”
According to a study by the Tax Foundation, the elimination of LIFO as an allowable tax accounting method would reduce GDP by $11.6 billion per year and would reduce federal revenue by $518 million per year. The study also notes the short term impact of the retroactive repeal of LIFO reserves could result in 50,300 job losses, which would be compounded over time by the loss of revenue and GDP.
“Preserving LIFO is necessary to a thriving business community. As long as inventories are required by the tax code, keeping LIFO is the right policy,” said West.