Materials for the Depreciation, Repairs and Fixed Assets course:
Update for Changes in the Past Year
Year End Developments
Despite speculation that Congress might fix the “retail glitch” to put qualified improvement property back on the intended 15 year life in a year end bill, that did not happen at the end of 2019. Negotiators could not strike a deal to allow for this technical correction to be part of the year end bill.
It also is not clear what the chances are for a fix in 2020, at least before the November elections. Democrats look at this as a problem that Republicans created in pushing through the TCJA without any votes from Democrats, much like Republicans viewed similar glitches in the Affordable Care Act as being the fault of Democrats for pushing forward without any Republican votes back in 2010. And their tactics to allow fixes to be made are much the same—if they want what “they broke” fixed, they have to allow something in the bill that the Democrats want that the Republicans oppose.
Currently that ask is for an increase in the amounts of a number of refundable credits. So far the Democrats have asked for more than the Republicans will give on this issue, and the Republicans have offered less than the Democrats will accept. An election year complicates the issue even more, as members do not want to appear to be “giving in” to the other side, especially before a primary contest.
There may be a better chance in any potential lame duck session after the election to get something done. Congress has used those sessions in the past to clear legislation that was too “hot” politically to get through otherwise, since a number of members who are leaving (either voluntarily or because they lost in the election) no longer worry about losing votes back home. Similarly, those who will come back in January 2021 are as far away from their next election as they will ever be in the session, so there’s a good chance voters will have forgotten this issue by the time they next go to the ballot box.
But it remains to be seen if Congress will somehow get a fixed passed before November elections or if there would even be an attempt to pass this in a lame duck session.