Rev. Rul. 96-18
1996-1 C.B. 81, 1996-13 I.R.B. 4

INTERNAL REVENUE SERVICE
Revenue Ruling

LIFO; PRICE INDEXES; DEPARTMENT STORES

Published: March 25, 1996

Section 472. - Last-in, First-out Inventories, 26 CFR 1.472-1: Last-in, first- out inventories.
LIFO; price indexes; department stores. The January 1996 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 January 31, 1996.

The following Department Store Inventory Price Indexes for January 1996 were issued by the Bureau of Labor Statistics on February 28, 1996. 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, January 31, 1996.

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, foods, liquor, tobacco, and contract departments.

BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS
(January 1941 = 100, unless otherwise noted)

Groups January 1995/January 1996/Percent Change from Jan. 1995 to Jan. 1996 [Fn1]
1. Piece Goods 480.1 519.0 8.1
2. Domestics and Draperies 632.3 648.4 2.5
3. Women's and Children's Shoes 627.4 628.8 0.2
4. Men's Shoes 917.6 887.6 -3.3
5. Infants' Wear 613.6 641.1 4.5
6. Women's Underwear 528.0 519.1 -1.7
7. Women's Hosiery 282.3 289.4 2.5
8. Women's and Girls' Accessories 542.2 554.2 2.2
9. Women's Outerwear and Girls' Wear 398.4 400.3 0.5
10. Men's Clothing 595.7 602.7 1.2
11. Men's Furnishings 553.7 560.6 1.2
12. Boys' Clothing and Furnishings 480.5 478.5 -0.4
13. Jewelry 1005.9 994.5 -1.1
14. Notions 746.3 802.7 7.6
15. Toilet Articles and Drugs 842.6 875.4 3.9
16. Furniture and Bedding 646.7 668.9 3.4
17. Floor Coverings 571.8 563.6 -1.4
18. Housewares 775.9 800.5 3.2
19. Major Appliances 248.5 247.6 -0.4
20. Radio and Television 84.2 78.9 -6.3
21. Recreation and Education [fn2] 114.6 112.6 -1.7
22. Home Improvements [fn2] 122.0 123.1 0.9
23. Auto Accessories [fn2] 106.4 107.7 1.2
Groups 1 - 15: Soft Goods 579.3 585.2 1.0
Groups 16 - 20: Durable Goods 464.5 467.0 0.5
Groups 21 - 23: Misc. Goods [fn2] 114.1 113.2 -0.8
Store Total [fn3] 541.2 544.9 0.7

FN1 Absence of a minus sign before percentage change in this column signifies price increase.
FN2 Indexes on a January 1986=100 base.
FN3 The store total index covers all departments, including some not listed separately, except for the following: candy, foods, liquor, tobacco, and contract departments.

DRAFTING INFORMATION

The principal author of this revenue ruling is Stan Michaels of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Michaels on (202) 622- 4970 (not a toll-free call).

Rev. Rul. 96-18, 1996-1 C.B. 81, 1996-13 I.R.B. 4