HIGH POINT, NC — Two of the industries hardest hit by the economic downturn are housing and retail. Leading industry associations, including the American Home Furnishings Alliance (AHFA), International Sleep Products Assn. (ISPA) and the National Home Furnishings Assn., (NHFA), have joined a coalition that is proposing consumer and commercial tax incentives designed to help both of these industries.
“Incentives for the purchase of home furnishings and building products will help boost the housing market, help low- and middle-income taxpayers, and directly protect American manufacturing and retail jobs,” says AHFA CEO Andy Counts. The coalition, which also includes the Carpet and Rug Institute (CRI), Kitchen Cabinet Manufacturers Assn. (KCMA), National Paint and Coatings Assn. (NPCA), Resilient Floor Covering Institute (RFCI) and World Floor Covering Assn. (WFCA), has been circulating the industry proposal on Capitol Hill and among members of President-Elect Barack Obama’s Transition Team.
Specifically, the coalition has proposed a temporary (two- to three-year maximum) refundable consumer tax credit for the purchase or installation of home furnishings. A 10% to 20% refundable credit would apply to renters and homeowners with an annual income of $50,000 or less.
The proposal also includes a 10% tax deduction (capped at $1,000-$2,000) for the purchase or installation of home furnishings for individuals with an annual income less than $150,000 and couples with annual income less than $250,000.
Commercial, retail and contractor incentives would include: a 10% refundable tax credit for inventory purchases of building products by retailers, distributors and contractors; a retailer, distributor and contractor deduction for bad debt based on historical experience rather than when the debt is in fact proven to be uncollectible; a capped tax credit for commercial and investor taxpayers on the purchase of building products otherwise considered to be ordinary and necessary building expenses (paint, for example); and a 50% bonus depreciation in the year of purchase for depreciable building products for commercial and investor taxpayers.
“Our coalition’s recommendations are timely and targeted,” said ISPA President and CEO Dick Doyle. “By stimulating the sales of home furnishings and home improvements through our proposed consumer tax credit, we not only help create demand for our industry’s products, we help generate good paying American jobs.”
It is estimated that the stimulus proposal would help generate about 352,000 American jobs in retail, manufacturing and contractor services as households renew or expand home improvement and remodeling projects. In addition, it is estimated that the proposal could return as much as $128 billion to the United States economy over a two-year period by promoting home improvement and remodeling projects, as well as home furnishings purchases.
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