Revenue Ruling 2005-63 - September 26, 2005

LIFO; price indexes; department stores. The July 2005 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, July 31, 2005.

The following Department Store Inventory Price Indexes for July 2005 were issued by the Bureau of Labor Statistics. The indexes are accepted by the Internal Revenue Service, under § 1.472-1(k) of the Income Tax Regulations and Rev. Proc. 86-46, 1986-2 C.B. 739, for appropriate application to inventories of department stores employing the retail inventory and last-in, first-out inventory methods for tax years ended on, or with reference to, July 31, 2005.

The Department Store Inventory Price Indexes are prepared on a national basis and include (a) 23 major groups of departments, (b) three special combinations of the major groups — soft goods, durable goods, and miscellaneous goods, and (c) a store total, which covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco, and contract departments.

BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS (January 1941 = 100, unless otherwise noted)
Groups		July 2004	July 2005	Percent Change from July 2004 to July 2005¹
1.	Piece Goods	507.8	495.0	-2.5
2.	Domestics and Draperies	525.0	517.7	-1.4
3.	Women’s and Children’s Shoes	608.5	629.0	3.4
4.	Men’s Shoes	831.7	867.0	4.2
5.	Infants’ Wear	560.5	548.0	-2.2
6.	Women’s Underwear	508.0	541.2	6.5
7.	Women’s Hosiery	330.4	339.7	2.8
8.	Women’s and Girls’ Accessories	565.8	580.5	2.6
9.	Women’s Outerwear and Girls’ Wear	335.9	321.7	-4.2
10.	Men’s Clothing	532.7	520.6	-2.3
11.	Men’s Furnishings	567.0	552.6	-2.5
12.	Boys’ Clothing and Furnishings	420.9	386.1	-8.3
13.	Jewelry	907.8	870.2	-4.1
14.	Notions	798.6	809.2	1.3
15.	Toilet Articles and Drugs	993.3	997.1	0.4
16.	Furniture and Bedding	616.3	599.1	-2.8
17.	Floor Coverings	587.7	609.8	3.8
18.	Housewares	712.1	712.2	0.0
19.	Major Appliances	199.6	203.5	2.0
20.	Radio and Television	41.6	38.9	-6.5
21.	Recreation and Education²	80.3	77.9	-3.0
22.	Home Improvements²	129.8	137.6	6.0
23.	Automotive Accessories²	112.7	115.1	2.1

Groups 1-15: Soft Goods		545.1	537.3	-1.4
Groups 16-20: Durable Goods		382.3	379.6	-0.7
Groups 21-23: Misc. Goods²		93.3	93.0	-0.3

	Store Total³	487.2	481.6	-1.1

¹Absence of a minus sign before the percentage change in this column signifies a price increase.
²Indexes on a January 1986 = 100 base.
³The store total index covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco and contract departments.

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The principal author of this revenue ruling is Michael Burkom of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Burkom at (202) 622-7924 (not a toll-free call).

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LIFO; Price Indexes; Department Stores

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