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TRSA Seeks Rental Textile Deductions

ALEXANDRIA, Va. — TRSA is continuing to seek Congressional support for the industry’s effort to convince the Internal Revenue Service (IRS) that it should adhere to its 2008 plan to maintain rules governing deductibility of rental textile items. The agency seeks to disallow such deductions unless rental laundry companies account for the life cycles of individual items. That would create an onerous, if not impossible, inventory-tracking challenge for the industry, TRSA says.
Purchases of such items can be deducted 100% on rental companies’ tax returns in the year of the buy. The IRS has sought to require goods that last more than a year to be amortized (depreciated) over their anticipated life spans.
If laundries tracked every item and reported this to the IRS, the agency would have evidence to make its case for amortization. But such tracking would be prohibitively expensive, TRSA forecasts, forcing rental laundries to increase prices. That would discourage customers from renting these goods, reducing industry sales and decreasing its tax outlay.
The association is recommending that the IRS implement such requirements only for goods that cost launderers more than $100 apiece, each of which is usually tracked.
 

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