Rev. Rul. 96-46
1996-2 C.B. 40, 1996-39 I.R.B. 5

INTERNAL REVENUE SERVICE
Revenue Ruling

LIFO; PRICE INDEXES; DEPARTMENT STORES

Published: September 23, 1996

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

The following Department Store Inventory Price Indexes for July 1996 were issued by the Bureau of Labor Statistics on August 13, 1996. The indexes are accepted by the Internal Revenue Service, under s 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, July 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 July 1995/July 1996/Percent Change from July 1995 to July 1996 [Fn1]
1. Piece Goods 515.5 539.2 4.6
2. Domestics and Draperies 656.6 635.6 -3.2
3. Women's and Children's Shoes 617.5 643.9 4.3
4. Men's Shoes 914.5 888.2 -2.9
5. Infants' Wear 596.5 609.3 2.1
6. Women's Underwear 526.0 536.9 2.1
7. Women's Hosiery 283.3 289.3 2.1
8. Women's and Girls' Accessories 546.7 544.7 -0.4
9. Women's Outerwear and Girls' Wear 398.1 380.6 -4.4
10. Men's Clothing 593.3 610.3 2.9
11. Men's Furnishings 550.5 573.0 4.1
12. Boys' Clothing and Furnishings 474.7 475.9 0.3
13. Jewelry 999.0 1016.0 1.7
14. Notions 838.7 779.4 -7.1
15. Toilet Articles and Drugs 861.1 880.9 2.3
16. Furniture and Bedding 657.8 671.6 2.1
17. Floor Coverings 563.7 577.5 2.4
18. Housewares 777.6 811.9 4.4
19. Major Appliances 245.2 245.8 0.2
20. Radio and Television 82.0 79.2 -3.4
21. Recreation and Education [fn2] 113.9 112.7 -1.1
22. Home Improvements [fn2] 122.4 126.8 3.6
23. Auto Accessories [fn2] 106.7 107.0 0.3
Groups 1 - 15: Soft Goods 580.5 582.4 0.3
Groups 16 - 20: Durable Goods 462.4 470.3 1.7
Groups 21 - 23: Misc. Goods [fn2] 113.8 113.5 -0.3
Store Total [fn3] 541.2 544.2 0.6

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. 96-46, 1996-2 C.B. 40, 1996-39 I.R.B. 5