NRF Says $10 Billion Business Tax Refund in Unemployment Bill Will Help Save Retail Jobs

WASHINGTON--(Business Wire)--
The National Retail Federation welcomed today`s passage of legislation that will
bring recession-plagued retailers and other businesses more than $10 billion in
badly needed cash by lengthening the period during which they can "carry back"
current losses to claim a tax refund from previous years when they made a
profit.

"This legislation will provide retailers with an important source of capital to
finance their operations and keep employees on the payroll," NRF Vice President
and Tax Counsel Rachelle Bernstein said. "Because retail sales have fallen so
dramatically over the past year and access to capital has been so limited,
retailers are experiencing severe challenges in finding the cash they need to
operate their businesses as the economy moves toward recovery."

"Today`s vote comes at a crucial time because most retailers see between a
quarter and half of their annual sales during the final quarter of the year as
consumers buy gifts for the holidays," Bernstein said. "If retailers can`t find
a way finance inventories for the 2009 holiday season, many could be forced to
close stores, lay off workers or even go out of business. This will help keep
that from happening."

The House voted 403-12 today to approve Senate amendments to H.R. 3548, the
Unemployment Compensation Extension Act of 2009, and sent the measure to
President Obama for his signature. The bill extends unemployment insurance
benefits but also includes a provision added in the Senate that will expand
businesses` ability to "carry back" net operating losses suffered during the
current recession in order to claim a refund from taxes paid in previous years.

Existing law allows companies to carry back a loss for up to two years. Economic
stimulus legislation enacted in February expanded the period to five years for
companies with up to $15 million in annual gross receipts, but larger businesses
were still restricted to two years. The provision included in the unemployment
bill will expand the five-year period to include all businesses that suffer a
loss regardless of size, and will give companies the choice of using the
carryback for losses from either 2008 or 2009 rather than just 2008 as provided
in the stimulus bill. In the fifth year, the carryback will be limited to 50
percent of a company`s taxable income for that year, but any loss not utilized
can be "carried forward." Small companies that took a five-year carryback under
the stimulus bill will be able to carry back 2009 losses as well. The proposal
is estimated to provide $10.4 billion in tax relief over 10 years.

The provision was added to the bill by Senate Majority Leader Harry Reid,
D-Nev., and Senate Finance Committee Chairman Max Baucus, D-Mont., but was based
on legislation sponsored in the Senate by Baucus and fellow Finance Committee
member Senator Olympia Snowe, R-Maine, and in the House by Select Revenue
Measures Subcommittee Chairman Richard Neal, D-Mass., and Ranking Member Patrick
Tiberi, R-Ohio.

"The sponsors of these bills have been telling their fellow members of Congress
for months that this is about saving and creating jobs, and if it wasn`t enacted
soon more jobs would be lost," Bernstein said. "That message has been heard, and
the work that has been done is going to help tens of thousands of retail workers
keep their jobs at a time when jobs are hard to find."

NRF has led the retail industry`s efforts for the five-year carryback,
explaining to Congress that many retailers hadn`t seen sufficient profits before
the current recession for a two-year carryback to be adequate. NRF testified on
the issue before the House Small Business committee in September.

The National Retail Federation is the world's largest retail trade association,
with membership that comprises all retail formats and channels of distribution
including department, specialty, discount, catalog, Internet, independent
stores, chain restaurants, drug stores and grocery stores as well as the
industry's key trading partners of retail goods and services. NRF represents an
industry with more than 1.6 million U.S. retail establishments, more than 24
million employees - about one in five American workers - and 2008 sales of $4.6
trillion. As the industry umbrella group, NRF also represents more than 100
state, national and international retail associations. www.nrf.com.

National Retail Federation
J. Craig Shearman, 202-626-8134
shearmanc@nrf.com

Copyright Business Wire 2009