Rev. Rul. 96-36
1996-2 C.B. 38, 1996-30 I.R.B. 6

INTERNAL REVENUE SERVICE
Revenue Ruling

LIFO; PRICE INDEXES; DEPARTMENT STORES

Published: July 22, 1996

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

The following Department Store Inventory Price Indexes for May 1996 were issued by the Bureau of Labor Statistics on June 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, May 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 May 1995/May 1996/Percent Change from May 1995 to May 1996 [Fn1]
1. Piece Goods 507.4 545.1 7.4
2. Domestics and Draperies 643.5 649.3 0.9
3. Women's and Children's Shoes 635.2 659.7 3.9
4. Men's Shoes 920.2 906.5 -1.5
5. Infants' Wear 599.2 631.2 5.3
6. Women's Underwear 529.4 534.1 0.9
7. Women's Hosiery 283.1 286.8 1.3
8. Women's and Girls' Accessories 539.4 550.8 2.1
9. Women's Outerwear and Girls' Wear 437.0 417.9 -4.4
10. Men's Clothing 610.4 626.1 2.6
11. Men's Furnishings 575.7 593.3 3.1
12. Boys' Clothing and Furnishings 483.8 493.3 2.0
13. Jewelry 984.9 1020.1 3.6
14. Notions 750.3 773.8 3.1
15. Toilet Articles and Drugs 857.9 883.8 3.0
16. Furniture and Bedding 655.3 668.0 1.9
17. Floor Coverings 569.4 576.1 1.2
18. Housewares 775.1 803.9 3.7
19. Major Appliances 247.3 245.1 -0.9
20. Radio and Television 84.8 79.2 -6.6
21. Recreation and Education [fn2] 114.3 112.8 -1.3
22. Home Improvements [fn2] 122.3 127.2 4.0
23. Auto Accessories [fn2] 107.2 107.4 0.2
Groups 1 - 15: Soft Goods 597.1 603.0 1.0
Groups 16 - 20: Durable Goods 465.4 467.6 0.5
Groups 21 - 23: Misc. Goods [fn2] 114.2 113.7 -0.4
Store Total [fn3] 552.4 556.3 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. 96-36, 1996-2 C.B. 38, 1996-30 I.R.B. 6