Revenue Ruling 2006-48, September 25, 2006

LIFO; price indexes; department stores. The July 2006 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, 2006.

The following Department Store Inventory Price Indexes for July 2006 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, 2006.

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 2005	July 2006	Percent Change from July 2005 to July 2006¹
1.	Piece Goods	495.0	465.0	-6.1
2.	Domestics and Draperies	517.7	488.7	-5.6
3.	Women’s and Children’s Shoes	629.0	655.7	4.2
4.	Men’s Shoes	867.0	875.4	1.0
5.	Infants’ Wear	548.0	557.7	1.8
6.	Women’s Underwear	541.2	546.8	1.0
7.	Women’s Hosiery	339.7	343.8	1.2
8.	Women’s and Girls’ Accessories	580.5	544.5	-6.2
9.	Women’s Outerwear and Girls’ Wear	321.7	327.3	1.7
10.	Men’s Clothing	520.6	514.2	-1.2
11.	Men’s Furnishings	552.6	550.3	-0.4
12.	Boys’ Clothing and Furnishings	386.1	371.3	-3.8
13.	Jewelry	870.2	898.0	3.2
14.	Notions	809.2	822.9	1.7
15.	Toilet Articles and Drugs	997.1	995.1	-0.2
16.	Furniture and Bedding	599.1	602.4	0.6
17.	Floor Coverings	609.8	614.1	0.7
18.	Housewares	712.2	697.1	-2.1
19.	Major Appliances	203.5	204.2	0.3
20.	Radio and Television	38.9	35.8	-8.0
21.	Recreation and Education²	77.9	76.3	-2.1
22.	Home Improvements²	137.6	139.6	1.5
23.	Automotive Accessories²	115.1	120.7	4.9

Groups 1-15: Soft Goods		537.3	538.3	0.2
Groups 16-20: Durable Goods		379.6	373.2	-1.7
Groups 21-23: Misc. Goods²		93.0	93.4	0.4

	Store Total³	481.6	480.8	-0.2

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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