Bob Richardson

What’s Changed Since our Top 50 List was Published in October?

In October, we released a Top 50 LIFO candidates list that used inflation rates for the 9 months ended September 2019. As of last Wednesday, December 2019 Producer Price Indexes (PPI) were published and the books have now been closed on inflation rates for 2019. Over the past few days, we’ve crunched the numbers to identify the best opportunities for companies to reduce taxable income from using LIFO. Our complete list includes 200 PPI categories that are sure to provide great tax savings from LIFO both this year & in the long run.

2019 Inflation Highlights

A wide range of opportunities are abound for companies looking to accumulating LIFO benefits starting this year. Of the 15 BLS major commodity groups, we’ve highlighted the top five in terms of the potential current & long-term LIFO benefits they provide below:

Processed Foods & Feeds

The 02 Processed foods & feeds BLS major commodity group represents commodities carried by supermarkets, grocery stores, alcohol distributors/wholesalers, food manufacturers & wholesalers. It is estimated that over 60% of grocery store chains use LIFO, and a large percentage of our client-base have product mixes that are composed of items falling within the 02 Processed foods & feeds category. Notable inflation rates for the 3-digit categories within the Processed foods & feeds group for the 12 months ended Dec. ’19 are shown below:

  • 02 – Processed foods & feeds: 2.5%
    • 022 – Meats: 5.6%
    • 023 – Dairy: 7.7%
    • 025 – Sugar & confectionary products: 3.5%
    • 026 – Beverage & beverage materials: 1.7%

Machinery & Equipment

The 11 Machinery & equipment group represents another large pool of items that make up predominant portions of a large number of LIFO taxpayers product mixes. A large percentage of ag, farm & construction equipment dealerships are on LIFO, and most of the publicly traded manufacturers of these types of products are as well, including Deere, Case New Holland & Caterpillar. One of the primary reasons for this is that the categories within this group have provided some of the most consistent long-term inflation rates. Seven of the eight three-digit 11 categories listed above have had inflation in at least 17 or more of the past 20 years. Between 2000 – 2019, the 111 Ag machinery & equipment category has measured inflation in all 20 years and has maintained a 3/5/10/20 year average annual inflation rate of between 1.8% – 2.4%. The 112 Construction machinery & equipment category has had inflation in 19 of the prior 20 years since 2000 & has maintained a 3/5/10/20 year average annual inflation rate of between 1.7% – 2.3%. Notable inflation rates for the 3-digit categories within the Machinery & equipment group for the 12 months ended Dec. ’19 are shown below:

  • 11 – Machinery & equipment: 1.6%
    • 111 – Agricultural machinery & equipment: 2.3%
    • 112 – Construction machinery & equipment: 2.2%
    • 113 – Metalworking machinery & equipment: 1.3%
    • 114 – General purpose machinery & equipment: 2.3%
    • 116 – Special industry machinery & equipment: 2.0%
    • 117 – Electrical machinery & equipment: 1.7%
    • 118 – Miscellaneous instruments: 2.1%
    • 119 – Miscellaneous machinery: 1.5%

Furniture & Household Durables

The 12 Furniture & household durables group frequently ranks near or at the top of the 15 BLS major commodity groups in terms of consistent inflation. Since 2000, this category has measured inflation in 19 of the past 20 years and the 3/5/10/20 year average annual inflation range between 1.5% – 2.5% as of the December 2019 year end. A large number of furniture manufacturers, wholesalers & retailers are on LIFO thanks to the 121 & 122 PPI inflation. The 121 Household furniture category’s 3/5/10/20 year average annual inflation rates through 2019 have ranged between 1.9% – 2.6% & the 122 Commercial furniture category has been between 1.9% – 3.2%. Both of the furniture 3-digit categories have had inflation in 18 or more of the past 20 years between 2000 – 2019. Notable inflation rates for the 3-digit categories within the Furniture & household durables group for the 12 months ended Dec. ’19 are shown below:

  • 12 – Furniture & household durables: 2.0%
    • 121 – Household furniture: 2.2%
    • 122 – Commercial furniture: 2.5%
    • 126 – Other household durable goods: 1.3%

Nonmetallic Mineral Products

The 13 Nonmetallic mineral products group houses BLS categories with some of the highest and most consistent inflation. Since 2000, this category has measured inflation in 19 of the past 20 years and the 3/5/10/20 year average annual inflation rates have been between 2.3% – 3% through 2019. Notable inflation rates for the 3-digit categories within the Nonmetallic mineral products group for the 12 months ended Dec. ’19 are shown below:

  • 13 – Nonmetallic mineral products: 1.5%
    • 131 – Glass: 1.4%
    • 132 – Concrete ingredients & related products: 3.3%
    • 133 – Concrete products: 2.7%
    • 134 – Clay construction products excluding refractories: 1.3%
    • 135 – Refractories: 5.3%
    • 138 – Glass containers: 2.7%

Miscellaneous Products

The 15 Miscellaneous products group includes a wide range of BLS categories that mainstays in terms of consistent inflation. Five of the seven Miscellaneous products categories listed above have had inflation in 17 or more of the past 20 years since 2000, and both the 154 Photographic equipment and supplies and 155 Mobile homes categories have had inflation in all 20 years since 2000. A vast majority of the companies that are on LIFO include tobacco as a part of their LIFO election scope because it has some of the highest & most consistent historical inflation. Notable inflation rates for the 3-digit categories within the Miscellaneous products group for the 12 months ended Dec. ’19 are shown below:

  • 15 – Miscellaneous products: 4.0%
    • 151 – Toys, sporting goods, small arms, etc.: 4.6%
    • 152 – Tobacco products, incl. stemmed & redried: 6.1%
    • 153 – Notions: 1.5%
    • 154 – Photographic equipment & supplies: 7.1%
    • 155 – Mobile homes: 8.7%
    • 156 – Medical, surgical & personal aid devices: 1.4%
    • 159 – Other miscellaneous products: 5.6%


Top LIFO Candidates List Criteria

The criteria for being included in the list below is as follows:

  • 1.5% or greater current year PPI inflation rate for the 12 months ended December 2019 (December 2019 ÷ December 2018)
  • Inflation frequency rate of greater than or equal to 60% (15 or more of 20 periods measured with inflation between 2000 – 2019)
  • Three of the four historical average annual inflation rates must be 1% or greater (historical rates are the 3/5/10/20 year percentages shown below*)

2019 Top LIFO Candidates List

PPI CodePPI Category Description1Y Dec. '191Y Dec. '183Y Avg.5Y Avg.10Y Avg.20Y Avg.# Years Indexes Published '00 - '19# Yrs Inflation '00 - '19Inflation Freq. Rate '00 - '19
02Processed foods & feeds2.5%0.7%1.2%-0.4%1.7%2.4%201785%
021130Retail bakery products3.0%7.1%4.2%4.3%--55100%
02210126Beef, fresh/frozen variety meats, not canned or made into sausage, made in slaughtering plants4.8%1.4%4.1%-6.2%4.3%-11873%
02210503Fresh/processed sausage, deli & cooked meats, etc.2.7%-0.7%2.4%0.3%3.1%-181267%
02210579Canned meats, excluding dog, cat & baby food21.3%-0.2%7.7%4.1%3.0%2.7%201575%
0223Unprocessed and prepared seafood6.6%1.0%1.3%2.5%3.5%3.1%201575%
022304Canned seafood (including soups, stews & chowders)11.8%15.7%12.6%8.4%5.6%4.4%191474%
0234Ice cream and frozen desserts2.8%0.8%2.0%1.2%2.3%2.3%201890%
0244Canned vegetables and juices3.5%4.7%3.2%0.8%0.8%2.0%201680%
0245Frozen vegetables1.8%2.4%3.2%2.1%1.8%2.7%201890%
025Sugar and confectionery3.5%1.1%1.5%1.1%1.4%2.7%201680%
0254Confectionery materials7.4%0.1%3.2%2.7%-0.1%3.4%201575%
0255Confectionery end products2.2%1.7%0.8%0.6%2.1%2.6%201680%
025503Candy and nuts2.4%1.4%0.7%0.5%2.3%2.6%201785%
02550301Chocolate and chocolate-type confectionery products3.9%1.3%2.1%1.6%2.2%2.8%2020100%
02550302Nonchocolate-type confectionery products1.7%4.0%2.1%1.7%1.7%2.1%201995%
026Beverages and beverage materials1.7%1.7%1.4%1.3%1.5%2.1%2020100%
02610101Bottled beer and ale1.5%1.8%1.5%1.5%2.0%2.0%201995%
02610105Beer and ale in barrels and kegs3.7%1.7%2.2%2.1%3.0%3.7%201995%
0262Soft drinks3.8%1.9%1.9%2.0%1.7%2.2%2020100%
0264Other beverage materials3.3%2.8%2.3%2.1%1.6%2.4%201890%
0289015411Soft drink flavoring syrup, sold in bulk4.0%3.5%3.5%4.0%--8675%
02890162Dairy product substitutes3.7%2.1%0.9%0.9%1.3%1.9%201680%
029402Pet food3.1%3.4%1.8%1.5%2.1%3.0%201890%
03460102Vinyl coated fabrics, including expanded vinyl coated2.3%4.7%3.4%2.0%1.8%2.4%201470%
0347Screen printed textile materials, embroideries & lace goods3.5%2.0%2.2%1.5%1.0%0.9%201680%
03810424Gloves & mittens, made from purchased materials5.5%2.8%3.1%2.3%--88100%
03830345Canvas & related products4.9%2.7%3.1%2.3%2.4%-161488%
0576Finished lubricants2.5%7.5%4.6%1.8%3.4%5.8%201470%
057604Lubricating & similar oils2.6%7.8%4.7%1.8%3.6%5.9%201470%
0621Prepared paint2.6%6.0%3.5%1.7%2.5%3.3%201890%
062101Architectural coatings3.7%8.1%4.5%2.3%2.6%3.8%201680%
06210301Special purpose coatings, incl. marine, industrial & construction coatings2.4%7.3%4.2%2.2%2.8%3.7%201785%
0622Paint materials5.3%3.2%4.2%0.5%2.0%3.1%201575%
0637Biological products, including diagnostics3.6%2.2%1.6%2.0%2.2%2.5%201785%
0653Other agricultural chemicals4.5%4.3%2.9%1.1%0.5%1.5%201470%
06710401Soaps & detergents, commercial, industrial & institutional2.2%1.6%1.8%1.8%1.9%2.5%201995%
0672Polish & other sanitation goods4.0%6.9%4.8%3.0%1.8%2.0%201785%
06750504Dentifrices, mouthwashes, gargles & rinses11.8%0.3%3.7%2.8%--8675%
067903Industrial gases11.5%-0.4%5.1%5.3%4.3%3.4%201575%
0679040ANonstructural caulking compounds & sealants2.3%5.9%3.9%3.0%--8675%
071303Rubber & plastic belts & belting3.3%1.8%4.5%2.7%4.3%3.5%201680%
07130371Flat rubber & plastics belts & belting4.2%0.9%5.3%3.0%5.8%-161275%
071304Rubber & plastics hose2.8%4.2%2.6%1.6%2.3%3.0%201890%
07130616Rubber druggist & medical sundries, excluding gloves5.1%0.9%3.1%2.4%2.1%-161488%
07130618Rubber coated fabrics & garments2.6%3.3%2.3%1.7%2.5%-1212100%
07210604Plastics pipe fittings & unions2.4%8.6%6.0%4.3%4.2%-131292%
072602054Industrial machinery plastics products, excl foam (incl gears, bearings, bushings, cams)16.9%2.9%6.6%4.1%--6567%
07290198Products made of foam other than polystyrene or polyurethane2.6%1.7%2.5%1.6%1.6%-191368%
08210112Wood window units6.0%4.0%4.1%3.6%3.5%2.7%201995%
08410101Wood pallets & pallet containers, wood & metal combination4.0%8.8%5.5%2.9%3.7%-10880%
08710101Wood poles, piles & posts owned & treated by the same establishment5.5%2.2%2.6%1.3%2.3%2.4%201575%
09150322Setup (rigid) paperboard boxes5.9%5.4%3.7%3.1%2.5%2.4%201890%
091507Fiber cans, tubes & similar fiber products1.6%4.0%5.0%3.4%2.5%2.6%201785%
094Publications, printed matter & printing material2.6%2.2%1.8%1.1%0.9%-10990%
0945Manifold business forms printing3.2%6.8%4.1%2.6%2.9%-121075%
09470205Label & wrapper printing (flexographic)1.8%4.4%2.4%1.4%1.2%-11982%
10150227Soil pipe & fittings, cast iron4.9%12.4%3.0%2.5%--8675%
104101Builders' hardware1.7%3.0%2.3%1.6%2.0%2.5%201680%
10410341Other transportation equipment hardware, incl. marine & aircraft (excl. motor vehicle hardware)1.8%1.1%2.0%1.6%1.4%2.7%201890%
1042Hand & edge tools2.5%2.6%2.2%1.5%1.3%1.9%201890%
10420145Edge tools, hand operated7.5%1.1%3.1%2.3%2.3%-121192%
105Plumbing fixtures & fittings3.2%4.6%3.3%2.3%2.2%2.4%2020100%
10540211Bath & shower fittings2.4%8.8%4.2%2.8%2.7%2.0%191579%
10540218Lavatory & sink fittings4.4%6.3%-3.1%2.5%2.4%191789%
1056Enameled iron & metal sanitary ware3.5%1.6%2.2%1.5%2.1%3.1%191684%
106Heating equipment4.4%5.3%3.9%3.0%2.7%3.1%2020100%
106101Steam & hot water equipment2.2%3.4%2.6%1.6%2.3%3.4%201995%
1062Furnaces & heaters, including parts7.6%5.3%4.5%2.8%2.4%2.2%201785%
1064Domestic heating stoves2.4%1.6%2.7%2.5%2.2%2.6%201680%
1066Domestic water heaters2.4%8.4%4.2%4.1%3.4%5.2%201785%
1071Metal doors, sash & trim1.7%6.9%4.3%3.4%2.7%2.6%201890%
1075Heat exchangers & steam condensers3.0%5.9%3.3%2.8%2.7%3.2%201890%
107902Farm service buildings & other prefabricated & portable buildings, steel & aluminum2.7%7.5%3.8%-2.6%4.7%171482%
1081Bolts, nuts, screws, rivets & washers4.9%4.5%3.2%2.2%1.9%2.5%201680%
1083Lighting fixtures2.8%5.5%3.2%2.3%1.8%1.6%201995%
11Machinery & equipment1.6%2.5%1.7%1.0%0.9%0.7%201365%
111Agricultural machinery & equipment2.3%3.5%2.2%1.8%1.8%2.4%2020100%
111401Commercial turf & grounds care equipment, including parts & attachments2.3%2.9%1.6%1.1%1.0%-171588%
11140611Harvesting machinery (except hay & straw) & attachments6.0%3.4%3.3%2.8%2.3%-171694%
111407Haying machinery & attachments3.8%4.3%2.5%2.2%2.5%-171694%
112Construction machinery & equipment2.2%3.4%2.2%1.7%2.0%2.3%201995%
112ATractors & attachments, ex. parts3.7%3.8%2.7%1.9%2.2%-191895%
112BPower cranes, draglines, & shovels (excavators) (incl. surface mining equipment) (excl. parts)1.7%2.1%1.7%1.3%1.5%-191789%
112CMixers, pavers & related equipment (excluding parts)3.3%7.7%3.9%3.0%2.4%-191684%
112DOff-highway, equipment, ex. parts1.9%1.9%1.4%1.4%2.4%-1919100%
1132Power-driven handtools, including parts & attachments1.7%1.1%1.4%1.8%1.6%1.2%201785%
1133Welding machines & equipment1.6%5.7%3.5%2.6%2.6%3.2%201995%
113301Arc welding machines, components & accessories, excluding electrodes & stud welding equip3.0%7.9%4.9%3.9%3.5%3.2%201995%
1134Industrial process furnaces & ovens2.6%2.5%2.0%1.6%1.5%1.7%201995%
113502Precision measuring tools3.3%-1.4%0.8%1.1%1.1%1.5%191684%
1136Abrasive products2.8%2.3%2.3%1.8%2.0%2.1%201995%
1138Metal forming machine tools4.1%1.4%2.3%1.6%1.7%2.0%201890%
113826Metal-forming machine tools (except rebuilt & parts)4.4%1.4%2.2%1.4%1.7%-10990%
11390312Industrial injection-type molds made of metal for plastics3.3%2.9%2.0%1.2%1.6%-10880%
114General purpose machinery & equipment2.3%4.2%2.8%2.1%2.2%2.6%2020100%
114102Industrial pumps, except hydraulic fluid power pumps3.8%3.9%3.4%2.7%1.8%2.6%201995%
11411501Air & gas compressors & vacuum pumps3.2%7.3%4.4%2.7%3.2%-141393%
1142Elevators, escalators & other lifts4.3%2.6%3.2%2.5%1.9%1.6%201680%
114201Elevators & moving stairways3.9%2.9%3.4%2.5%2.0%1.5%201575%
114202Parts & attachments for elevators & moving stairs (sold separately)5.5%1.6%1.8%2.1%1.2%1.9%201680%
1143Fluid power equipment2.3%3.0%2.4%1.9%2.1%2.7%2020100%
114302Fluid power valves2.4%1.6%1.9%2.4%2.5%3.0%2020100%
114302014Nonaerospace type hydraulic valves, except directional control3.1%2.8%2.0%1.3%2.0%-1010100%
11430201AAerospace type fluid power valves2.0%1.2%1.8%3.1%--99100%
114303Fluid power cylinders, actuators, accumulators, cushions, & parts2.9%3.7%3.1%2.1%1.9%2.4%2020100%
114402Conveying equipment, except parts & accessories2.3%3.6%2.5%1.8%1.9%2.4%201785%
11440212Unit handling conveyors & conveying systems2.4%2.8%2.3%1.6%1.9%2.1%201680%
11440216Bulk material handling conveyors & conveying systems2.2%4.4%3.0%2.2%1.6%2.3%201995%
11440358Bulk powered material moving equipment, dock boards & metal pallets & skids2.3%12.9%4.9%3.0%2.4%-171588%
11440485Overhead traveling cranes & monorail systems4.1%6.6%3.8%3.5%2.8%2.7%201890%
1145Mechanical power transmission equipment1.7%4.3%2.5%1.7%2.0%2.8%201890%
1147Air purification equipment & industrial & commercial fans & blowers3.4%4.6%3.0%2.2%2.3%2.4%201995%
114701Fan, blower, air purification equipment3.4%4.6%3.0%2.2%2.3%2.4%201995%
1148Air conditioning & refrigeration equip3.1%5.2%3.4%2.4%2.1%2.0%201890%
114802Unitary air-conditioners, except air source heat pumps7.6%6.4%5.5%3.2%2.3%2.0%201575%
11480331Commercial refrigeration equipment1.8%1.3%1.5%2.1%2.3%-161594%
114807Heat transfer equipment, including heat pumps1.7%6.6%3.2%2.3%--88100%
1149Miscellaneous general purpose equipment2.8%3.7%2.9%2.0%2.5%2.8%2020100%
114902Metal valves, except fluid power1.8%5.7%3.4%2.8%3.4%3.8%2020100%
11490208Solenoid valves1.8%5.8%-3.1%-4.1%181683%
114905Ball & roller bearings5.3%4.1%3.6%2.1%2.4%2.7%201890%
114907Industrial patterns2.8%--2.0%2.3%2.1%171271%
116Special industry machinery & equipment2.0%2.1%1.7%1.4%1.2%1.4%201995%
1161Food products machinery2.2%3.7%2.5%2.1%2.3%2.7%2020100%
11610501Industrial food products machinery for processing foods, beverages, & animal & fowl feed3.1%2.3%2.6%2.5%2.9%3.2%201995%
1164Paper industries machinery2.4%1.7%1.4%1.1%1.7%1.7%2020100%
1169Commercial laundry & drycleaning machinery products3.1%3.2%2.7%2.1%1.9%2.7%2020100%
1171Wiring devices1.9%2.0%1.7%0.7%1.4%2.2%201575%
11710252Porcelain, steatite & other ceramic electrical products7.5%2.8%4.3%2.2%1.4%-161488%
1175Switchgear, switchboard, industrial controls equipment2.4%2.4%2.1%1.4%1.4%2.2%201890%
117507992Parts for industrial controls & motor-control accessories3.2%2.3%2.9%2.2%--88100%
11782299Switches, mechanical (electronic applications)5.0%2.1%2.9%2.0%1.6%1.6%191684%
117824Connectors for electronic circuitry1.8%2.6%2.3%1.3%1.9%1.5%201890%
11785399Electronic coils, transformers & other inductors1.9%1.6%1.6%1.3%1.3%-191684%
11792902Rectifying apparatus2.4%3.0%2.9%2.5%1.8%1.6%201785%
1181Automatic environmental controls for monitoring residential, commercial & appliance use4.0%4.6%3.4%2.5%1.5%1.2%201680%
1184Fluid meters & counting devices2.7%3.7%2.8%2.3%2.8%2.5%201995%
1185Engineering & scientific instruments2.7%2.3%2.8%2.5%2.0%2.1%201995%
11850111Aeronautical, nautical & navigational instruments4.3%3.6%4.4%3.4%2.8%2.4%191789%
1186Measuring instruments & lenses2.1%1.0%1.7%1.5%1.1%1.2%201995%
118603Laboratory analytical instruments2.8%1.0%2.2%1.9%1.4%1.5%2020100%
1189Measuring & controlling devices, n.e.c.2.8%0.9%1.8%1.6%1.2%1.0%201680%
118901Aircraft engine instruments5.8%1.6%3.6%3.4%1.8%1.2%191579%
118906Commercial, geophysical, meteorological & general-purpose instruments2.9%0.4%1.4%1.1%1.0%-1515100%
1192Mining machinery & equipment4.4%8.4%4.5%3.4%3.4%3.8%2020100%
119407Diesel, semidiesel & dual-fuel engines (except automotive)2.1%---1.6%1.5%151067%
119413Parts & accessories for internal combustion engines, ex. aircraft & gasoline automotive engines1.5%1.9%1.9%1.3%1.7%1.9%201890%
1197Turbines & turbine generator sets3.6%2.8%--0.4%0.4%1.9%191474%
11970103Steam, gas & other turbines & turbine generators4.1%-0.0%0.3%--6583%
12Furniture & household durables2.0%3.9%2.5%1.6%1.5%1.5%201995%
121Household furniture2.3%2.6%2.6%2.0%1.8%1.9%201995%
1211Metal household furniture18.2%-2.5%5.4%4.7%2.8%2.1%201470%
1212Wood household furniture1.8%0.1%1.2%1.3%1.8%1.9%2020100%
1215Metal porch, lawn, outdoor & casual furniture3.4%4.2%2.4%2.7%3.3%3.3%201680%
122Commercial furniture2.5%5.9%3.2%2.2%1.9%2.1%201890%
1221Wood office furniture & store fixtures2.7%2.7%2.5%1.6%1.7%1.7%2020100%
1222Nonwood furniture & store fixtures1.6%10.2%4.1%2.5%1.9%2.2%201785%
1223Public building furniture4.1%4.8%3.4%2.6%2.3%2.4%201890%
1224Commercial furniture & fixtures, n.e.c.5.3%-1.3%1.9%2.4%2.1%2.1%201890%
1245Portable residential lighting fixtures, including parts & accessories8.2%2.6%4.0%2.6%2.6%2.1%201575%
126101Vitreous china, porcelain & earthenware table & kitchenware & other pottery products1.7%4.8%2.6%2.0%2.3%1.9%201995%
1266Lawn/garden equipment1.6%2.7%1.5%1.0%0.6%0.7%201470%
1268Metal kitchen utensil, pots & pans2.8%4.5%3.0%2.2%1.7%2.1%201785%
13Nonmetallic mineral products1.5%4.1%2.6%2.3%2.4%3.0%201995%
132Concrete ingredients & related products3.3%3.6%3.5%3.9%2.9%3.6%201995%
1321Construction sand, gravel & crushed stone3.8%4.0%3.6%3.8%3.1%4.1%2020100%
133Concrete products2.7%3.5%3.0%3.1%2.6%3.2%201785%
1331Concrete block & brick3.1%3.5%3.1%2.7%2.0%2.8%201890%
133141Concrete pavers2.3%3.2%3.2%2.5%2.0%2.5%201785%
1332Concrete pipe5.6%-1.4%2.3%2.0%1.8%3.0%201680%
1333Ready-mix concrete2.4%3.0%2.8%3.3%2.6%3.4%201785%
1334Precast concrete products2.6%6.4%4.0%2.8%2.9%3.1%201995%
134201Building or common brick1.9%1.1%1.5%1.4%0.3%1.7%201680%
138Glass containers2.7%2.3%1.8%1.6%1.6%2.6%2020100%
1395Cut stone & stone products2.8%6.4%2.2%2.3%1.7%1.2%201575%
13990209Ground or treated minerals & earths2.5%0.8%1.3%1.5%2.8%3.6%2020100%
1413Truck & bus bodies3.9%3.8%2.9%2.3%1.9%2.5%201995%
1414Truck trailers2.9%8.5%4.2%2.7%2.4%2.5%201785%
1416Travel trailers & campers2.6%3.5%3.5%2.8%2.5%2.5%201995%
141602Camping trailers, campers, pick-up covers & parts3.5%4.9%5.7%4.9%3.7%3.5%2020100%
141602014Truck campers, caps, box covers & folddown camping trailers3.9%3.1%3.2%3.2%--55100%
142102Civilian aircraft2.2%3.0%2.5%1.8%2.1%3.2%201995%
14250103Aircraft parts & auxiliary equipment1.9%0.7%0.9%0.9%--77100%
143Ships & boats3.2%0.8%1.9%1.5%1.5%2.5%2020100%
151Toys, sporting goods, small arms, etc.4.6%0.4%1.6%1.3%1.2%1.2%201575%
15120185Playground equipment4.6%7.2%4.5%--4.6%141286%
152Tobacco products, incl. stemmed & redried6.2%5.7%5.7%5.4%5.3%4.4%201890%
155Mobile homes8.7%1.6%6.0%4.1%3.8%3.6%2020100%
155303Manufactured mobile homes & nonresidential mobile buildings8.7%1.6%6.0%4.1%3.8%3.6%2020100%
1563Medical & surgical appliances & supplies1.7%1.4%1.2%0.8%0.7%1.2%201890%
1565Dental equipment & supplies12.0%1.3%6.5%4.9%5.1%4.2%2020100%
1591Burial caskets5.9%3.2%3.9%3.9%3.7%4.4%2020100%
1594Jewelry & jewelry products2.8%0.5%1.1%1.6%2.4%2.7%201470%
159A0402Non-electric signs & displays3.1%2.9%3.9%2.6%2.1%2.1%201890%

Note: “-” dash indicates that an index was not published by the BLS for that period for one of the following reasons: 1) Insufficient number of price surveys received 2) Category did not exist during the period where a dash is shown

1 year inflation rates shown above use PPI for the 12 months ended December. For example, 1Y ended 2019 inflation rate is calculated as follows: Dec. ’19 ÷ Dec. ’18 PPI = 1Y inflation rate ended Dec. 2019.

Historical average annual inflation rates calculated using compound inflation formula. For example, 3Y average annual inflation rates calculated as follows: (((Dec. ’19 ÷ Dec. ’16 PPI)^(1/3))-1) = 3Y average annual inflation rate ended Dec. 2019.

Quick Analysis LIFO Tax Savings Formula

Use the following formulas to calculate the estimated LIFO tax savings that your client or company could achieve from using the LIFO method:

  • Current year taxable income reduction = estimated y/e inventory balance * estimated c/y inflation
  • Current year income tax reduction = current year taxable income reduction * tax rate

Example: To illustrate the use of the Quick Analysis LIFO Tax Savings Formula, assume the following:
Estimated year end inventory balance: $15,000,000
Estimated current year inflation: 2%
Tax rate: 30%
Current year taxable income reduction: $15,000,000 * 2% = $300,000
Current year income tax reduction: $300,000 * 30% = $90,000

A long-term LIFO benefit analysis could be achieved by using the same formula shown above and multiplying the results by the desired number of years that you’re wishing to project (i.e. 3/5/10/20 year).

Why we Use External Price Indexes to Identify the Top LIFO Candidates

Although there are many reasons why we use the government-published BLS PPI to identify the top LIFO candidates, the primary reasons are as follows:

  • Contains over 3,000 unique commodities that covers nearly all industries
  • Systematic procedures used to collect & calculate price indexes
  • Published on a monthly basis, meaning monthly rates can be easily tracked & annual inflation rates can be computed for all fiscal year end months
  • Consumer Price Index & Producer Price Index inflation can be used to make actual LIFO calculations (called IPIC LIFO; see our IPIC LIFO Overview & Resources page)
  • External price indexes are often found to provide higher inflation rates than internally calculated price changes

Find Out How Much LIFO Will Benefit Your Company with a Complimentary LIFO Election Benefit Analysis !

LIFO Election Benefit AnalysisHow LIFO Works

Maintain the Benefits Without any of the Hassle!

Outsource your LIFO calculation so you can enjoy the benefits and avoid all the hassle! LIFO-PRO’s turnkey outsourcing solutions provides you with the ability to maximize your LIFO benefits while minimizing the time & effort required to do so. You send us your inventory documentation & we take care of the rest. The finished product is a complete set of LIFO-PRO reports that include the exact amounts required for financial reporting & tax returns LIFO entries.
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