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Revenue Ruling 2006-06 January 30, 2006

LIFO; Price Indexes; Department Stores

LIFO; price indexes; department stores. The November 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, November 30, 2005.

The following Department Store Inventory Price Indexes for November 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, November 30, 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 Nov. 2004 Nov. 2005 Percent Change from Nov. 2004 to Nov. 20051
1. Piece Goods 507.8 480.6 -5.4
2. Domestics and Draperies 535.3 508.2 -5.1
3. Women’s and Children’s Shoes 656.6 684.7 4.3
4. Men’s Shoes 842.9 868.9 3.1
5. Infants’ Wear 584.3 564.1 -3.5
6. Women’s Underwear 518.5 548.8 5.8
7. Women’s Hosiery 342.0 339.8 -0.6
8. Women’s and Girls’ Accessories 583.1 582.1 -0.2
9. Women’s Outerwear and Girls’ Wear 376.8 368.3 -2.3
10. Men’s Clothing 542.5 542.1 -0.1
11. Men’s Furnishings 581.5 574.9 -1.1
12. Boys’ Clothing and Furnishings 430.1 403.5 -6.2
13. Jewelry 879.0 861.4 -2.0
14. Notions 789.1 803.1 1.8
15. Toilet Articles and Drugs 998.6 1001.0 0.2
16. Furniture and Bedding 601.7 596.7 -0.8
17. Floor Coverings 590.2 612.3 3.7
18. Housewares 711.8 701.9 -1.4
19. Major Appliances 201.6 204.3 1.3
20. Radio and Television 40.7 38.1 -6.4
21. Recreation and Education2 79.5 77.6 -2.4
22. Home Improvements2 130.6 137.2 5.1
23. Automotive Accessories2 113.1 116.5 3.0
         
Groups 1-15: Soft Goods 566.4 561.0 -1.0
Groups 16-20: Durable Goods 380.5 376.2 -1.1
Groups 21-23: Misc. Goods2 92.9 93.1 0.2
       
  Store Total3 499.6 495.4 -0.8
         
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.
         

DRAFTING INFORMATION

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).

Internal Revenue Bulletin 2006-05

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