Revenue Ruling 2005-45 - July 25, 2005

LIFO; price indexes; department stores. The May 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, May 31, 2005.

The following Department Store Inventory Price Indexes for May 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, May 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		May 2004	May 2005	Percent Change from May 2004 to May 2005¹
1.	Piece Goods	483.5	487.9	0.9
2.	Domestics and Draperies	542.2	533.8	-1.5
3.	Women’s and Children’s Shoes	645.0	666.7	3.4
4.	Men’s Shoes	868.4	878.3	1.1
5.	Infants’ Wear	575.6	572.5	-0.5
6.	Women’s Underwear	512.2	544.1	6.2
7.	Women’s Hosiery	338.2	343.1	1.4
8.	Women’s and Girls’ Accessories	567.5	594.1	4.7
9.	Women’s Outerwear and Girls’ Wear	377.2	366.8	-2.8
10.	Men’s Clothing	548.4	563.9	2.8
11.	Men’s Furnishings	594.3	585.5	-1.5
12.	Boys’ Clothing and Furnishings	445.2	431.0	-3.2
13.	Jewelry	905.2	892.1	-1.4
14.	Notions	797.5	811.0	1.7
15.	Toilet Articles and Drugs	1001.4	999.7	-0.2
16.	Furniture and Bedding	613.8	606.8	-1.1
17.	Floor Coverings	587.9	599.4	2.0
18.	Housewares	714.8	716.6	0.3
19.	Major Appliances	201.6	204.5	1.4
20.	Radio and Television	42.4	39.5	-6.8
21.	Recreation and Education²	80.8	78.5	-2.8
22.	Home Improvements²	129.1	136.5	5.7
23.	Automotive Accessories²	112.1	114.6	2.2

Groups 1-15: Soft Goods		570.1	568.3	-0.3
Groups 16-20: Durable Goods		384.2	382.3	-0.5
Groups 21-23: Misc. Goods²		93.4	93.2	-0.2

	Store Total³	503.2	501.5	-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.

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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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