Revenue Ruling 2006-59, LIFO; Price Indexes; Department Stores

LIFO; price indexes; department stores. The September 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, September 30, 2006.

The following Department Store Inventory Price Indexes for September 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, September 30, 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		Sep 2005	Sep 2006	Percent Change from Sep 2005 to Sep 2006¹
1.	Piece Goods	497.3	455.4	-8.4
2.	Domestics and Draperies	514.7	493.1	-4.2
3.	Women’s and Children’s Shoes	700.4	691.1	-1.3
4.	Men’s Shoes	890.9	888.7	-0.2
5.	Infants’ Wear	569.6	570.3	0.1
6.	Women’s Underwear	541.1	549.5	1.6
7.	Women’s Hosiery	338.6	347.1	2.5
8.	Women’s and Girls’ Accessories	572.2	521.2	-8.9
9.	Women’s Outerwear and Girls’ Wear	364.0	377.0	3.6
10.	Men’s Clothing	532.9	526.6	-1.2
11.	Men’s Furnishings	561.0	572.0	2.0
12.	Boys’ Clothing and Furnishings	393.1	403.0	2.5
13.	Jewelry	882.6	906.4	2.7
14.	Notions	807.4	818.5	1.4
15.	Toilet Articles and Drugs	996.4	1008.3	1.2
16.	Furniture and Bedding	596.0	598.4	0.4
17.	Floor Coverings	606.7	610.8	0.7
18.	Housewares	703.4	693.9	-1.4
19.	Major Appliances	204.4	204.6	0.1
20.	Radio and Television	38.6	35.1	-9.1
21.	Recreation and Education²	77.4	76.2	-1.6
22.	Home Improvements²	136.4	140.9	3.3
23.	Automotive Accessories²	116.3	121.6	4.6

Groups 1-15: Soft Goods		559.6	563.8	0.8
Groups 16-20: Durable Goods		377.0	371.4	-1.5
Groups 21-23: Misc. Goods²		92.8	93.7	1.0

	Store Total³	494.5	496.2	0.3

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 John Roman Faron of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Faron at (202) 622-8142 (not a toll-free call).

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