Revenue Ruling 2006-62, LIFO; Price Indexes; Department Stores

LIFO; price indexes; department stores. The October 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, October 31, 2006.

The following Department Store Inventory Price Indexes for October 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, October 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		2005	2006	Percent Change from Oct. 2005 to Oct. 2006¹
1.	Piece Goods	488.1	460.3	-5.7
2.	Domestics and Draperies	512.4	488.0	-4.8
3.	Women’s and Children’s Shoes	710.9	697.7	-1.9
4.	Men’s Shoes	884.9	886.7	0.2
5.	Infants’ Wear	566.9	582.1	2.7
6.	Women’s Underwear	542.9	551.3	1.5
7.	Women’s Hosiery	337.1	339.8	0.8
8.	Women’s and Girls’ Accessories	578.4	538.8	-6.8
9.	Women’s Outerwear and Girls’ Wear	374.0	383.0	2.4
10.	Men’s Clothing	538.4	533.9	-0.8
11.	Men’s Furnishings	571.2	581.1	1.7
12.	Boys’ Clothing and Furnishings	405.4	408.4	0.7
13.	Jewelry	873.8	907.3	3.8
14.	Notions	806.3	818.3	1.5
15.	Toilet Articles and Drugs	1003.6	1011.6	0.8
16.	Furniture and Bedding	598.1	600.8	0.5
17.	Floor Coverings	606.4	612.1	0.9
18.	Housewares	706.7	691.8	-2.1
19.	Major Appliances	203.7	206.7	1.5
20.	Radio and Television	38.3	34.9	-8.9
21.	Recreation and Education²	77.8	76.6	-1.5
22.	Home Improvements²	137.3	141.0	2.7
23.	Automotive Accessories²	116.3	121.8	4.7

Groups 1-15: Soft Goods		565.3	568.7	0.6
Groups 16-20: Durable Goods		377.4	371.6	-1.5
Groups 21-23: Misc. Goods²		93.2	94.0	0.9

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 John Roman Faron of the Office of Associate Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Faron at (202) 622-8142 (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.