Fast Track Depreciation Sought

The nation's foodservice operators may soon receive new federal tax incentives to expand or renovate their facilities, under legislation advanced by Rep. Mark Foley (R-FL) that calls for faster write-offs of restaurant buildings.

Currently, foodservice operators must depreciate their buildings over 39 years—a recovery period that Treasury Department experts acknowledge is too long to permit adequate compensation for needed restorations or remodelings of these facilities.

Industry average: "This long period is particularly onerous to restaurateurs who have to build, improve or rebuild their restaurants to keep up with changing customers, eating preferences, day-to-day customer traffic and wear and tear," National Restaurant Association officials agree. According to NRA studies, the average foodservice facility must be renovated every six-to-eight years.

Under Foley's bill, a shorter 15-year depreciation recovery period would apply to any "retail restaurant facility" at which "more than 50% of the building's square footage is devoted to preparation of, and seating for, on-premises consumption of prepared meals."