Internal Revenue Bulletin:  2006-32 

August 7, 2006 

Rev. Rul. 2006-40


Table of Contents

LIFO; price indexes; department stores. The May 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, May 31, 2006.

The following Department Store Inventory Price Indexes for May 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, May 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 May 2005 May 2006 Percent Change from May 2005 to May 20061
1. Piece Goods 487.9 473.3 -3.0
2. Domestics and Draperies 533.8 491.1 -8.0
3. Women’s and Children’s Shoes 666.7 712.4 6.9
4. Men’s Shoes 878.3 888.9 1.2
5. Infants’ Wear 572.5 569.7 -0.5
6. Women’s Underwear 544.1 550.4 1.2
7. Women’s Hosiery 343.1 348.7 1.6
8. Women’s and Girls’ Accessories 594.1 566.6 -4.6
9. Women’s Outerwear and Girls’ Wear 366.8 366.7 0.0
10. Men’s Clothing 563.9 541.5 -4.0
11. Men’s Furnishings 585.5 573.0 -2.1
12. Boys’ Clothing and Furnishings 431.0 410.8 -4.7
13. Jewelry 892.1 890.8 -0.1
14. Notions 811.0 805.7 -0.7
15. Toilet Articles and Drugs 999.7 997.0 -0.3
16. Furniture and Bedding 606.8 604.8 -0.3
17. Floor Coverings 599.4 605.9 1.1
18. Housewares 716.6 695.9 -2.9
19. Major Appliances 204.5 204.5 0.0
20. Radio and Television 39.5 36.6 -7.3
21. Recreation and Education2 78.5 76.9 -2.0
22. Home Improvements2 136.5 139.6 2.3
23. Automotive Accessories2 114.6 119.8 4.5
 
Groups 1-15: Soft Goods 568.3 563.0 -0.9
Groups 16-20: Durable Goods 382.3 373.9 -2.2
Groups 21-23: Misc. Goods2 93.2 93.6 0.4
 
  Store Total3 501.5 496.3 -1.0
 
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).


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