Rev. Rul. 96-26
1996-1 C.B. 83, 1996-21 I.R.B. 5

INTERNAL REVENUE SERVICE
Revenue Ruling

LIFO; PRICE INDEXES; DEPARTMENT STORES

Published: May 20, 1996

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

The following Department Store Inventory Price Indexes for March 1996 were issued by the Bureau of Labor Statistics on April 12, 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, March 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 March 1995/March 1996/Percent Change from Mar. 1995 to Mar. 1996 [Fn1]
1. Piece Goods 501.4 507.9 1.3
2. Domestics and Draperies 648.8 652.3 0.5
3. Women's and Children's Shoes 636.3 651.5 2.4
4. Men's Shoes 920.3 897.6 -2.5
5. Infants' Wear 623.9 643.0 3.1
6. Women's Underwear 522.8 535.9 2.5
7. Women's Hosiery 280.4 284.4 1.4
8. Women's and Girls' Accessories 540.3 556.5 3.0
9. Women's Outerwear and Girls' Wear 445.9 426.9 -4.3
10. Men's Clothing 616.9 625.5 1.4
11. Men's Furnishings 580.0 590.5 1.8
12. Boys' Clothing and Furnishings 489.2 490.9 0.3
13. Jewelry 1026.6 1052.5 2.5
14. Notions 778.5 781.1 0.3
15. Toilet Articles and Drugs 839.5 870.4 3.7
16. Furniture and Bedding 651.5 672.8 3.3
17. Floor Coverings 571.3 570.6 -0.1
18. Housewares 773.3 808.1 4.5
19. Major Appliances 247.5 248.5 0.4
20. Radio and Television 85.2 79.6 -6.6
21. Recreation and Education [fn2] 114.7 113.6 -1.0
22. Home Improvements [fn2] 121.7 123.3 1.3
23. Auto Accessories [fn2] 106.6 107.1 0.5
Groups 1 - 15: Soft Goods 603.7 606.1 0.4
Groups 16 - 20: Durable Goods 465.1 470.7 1.2
Groups 21 - 23: Misc. Goods [fn2] 114.2 113.8 -0.4
Store Total [fn3] 556.4 559.0 0.5

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. 96-26, 1996-1 C.B. 83, 1996-21 I.R.B. 5