WASHINGTON — Retailers lauded a sweeping omnibus spending and tax bill passed by Congress on Friday, noting it contains many provisions that will help companies create jobs, bolster defenses against cyber attacks and spur more investment through tax breaks.
The Senate passed the combined package on Friday on a vote of 65 to 33 and sent it to President Obama’s desk, capping weeks of negotiations on the compromise measure that prevented a government shutdown and provided certainty for businesses heading into the new year. The House had passed the spending and tax measures separately on Thursday and Friday morning.
The massive legislation includes a $1.1 trillion spending bill funding the federal government for fiscal year 2016 and renews more than 50 tax provisions for businesses and individuals that expired at the end of 2014.
“Congress has finally taken away the threat of a government shutdown that has threatened our nation’s economy the past few months, and given both consumers and businesses some certainty on what to expect in the future,” said David French, senior vice president for government relations at the National Retail Federation. “In addition to funding the government, this legislation is the first step toward fundamental tax reform that our economy so urgently needs.”
Retailers praised the inclusion of a cybersecurity measure aimed at increasing cyber-threat information sharing between the government and companies.
The cybersecurity measure was seen as the first step in strengthening defenses against cyber attacks that have hit such retailers as Target and Neiman Marcus and compromised the personal information of millions of consumers. It was the culmination of six years of legislative work and combines three bills that passed the House and Senate earlier this year.
Proponents of the bill had to overcome mounting opposition from digital rights groups, technology companies and privacy protection advocates who tried to block it, arguing that it would place too much private data in the hands of the government. The measure includes language protecting businesses from liability when they share information about cyber threats with the government, NRF noted.
“Sharing information on cyber threats will create an atmosphere of community vigilance that will ensure that consumer’s sensitive data is kept safe,” French said.
The omnibus spending bill will also increase funding levels for key trade-related agencies, including the U.S. Trade Representative’s office and Commerce Department’s International Trade Administration.
The NRF and Retail Industry Leaders Association said the new tax package will make permanent some of the tax breaks that have had to be renewed by Congress frequently.
“Making permanent many important tax provisions gives our companies the certainty they need to plan investments, and we believe this will greatly increase investments by our industry,” French wrote in a letter to congressional leadership.
The bill would make permanent a provision that allows retailers to depreciate remodeling and other improvements to their stores over 15 years rather than the previous standard of 39 years.
“The provision, which also applies to restaurants, is important because retailers typically remodel every five to seven years,” NRF said. “In addition to helping keep stores attractive to customers and profitable, the remodeling work creates tens of thousands of construction jobs each year.”
Another provision that allows companies to write off 50 percent of the cost of improvements under “bonus depreciation” would be extended for five years and also be expanded to cover stores and restaurants that are owned or leased.
It also makes permanent and increases the level of “Section 179 expensing,” the amount of investment a small business can write off entirely in the first year rather than it being depreciated over several years.
Another provision, known as the Work Opportunity Tax Credit, would be renewed for five years. It gives retailers a tax incentive to hire the disabled, welfare recipients and “economically challenged individuals.”
They will also get some relief from what they call burdensome mandates in the Affordable Care Act. The health care law’s so-called “Cadillac Tax” on high-value health insurance plans and a tax on medical devices will be delayed for two years, in addition to a one-year delay in a health-insurance tax.