Revenue Ruling 2006-40, August 7, 2006

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).

You can either: Search all IRS Bulletin Documents issued since January 1996, or Search the entire site. For a more focused search, put your search word(s) in quotes.

LIFO; Price Indexes; Department Stores

DRAFTING INFORMATION