To amend the Internal Revenue Code of 1986 to clarify the rules relating to lessee construction allowances and to contributions to the capital of retailers.

Amends the Internal Revenue Code, with respect to the exclusion from a lessee's gross income of qualified construction allowances for short-term leases, to repeal the limitation of such exclusion to short-term leases (thus extending the exclusion to allowances under any lease of retail space).

Revises the exclusion from gross income (safe harbor) for certain contributions to the capital of retailers. Extends such exclusion to any amount of money or other property received by the taxpayer if: (1) the taxpayer has entered into an agreement to operate (or cause to be operated) a qualified retail business at a particular location for a period of at least 15 years; (2) immediately after the receipt of such money or other property, the taxpayer owns (or uses such amount to acquire ownership of at least) the land the taxpayer will use in carrying on the business at that location; and (3) an amount equal to such amount is expended within two taxable years (expenditure rule) for the acquisition of land or for acquisition or construction of other property used in the trade or business which was the purpose motivating the contribution, and which is used predominantly in a qualified retail business at the location.

Declares that the taxpayer shall be treated as owning the land if the taxpayer is the lessee of such land under a lease having a term of at least 30 years, and on which only nominal rent is required.

Disallows any deduction or credit for, or by reason of, the expenditure which constitutes such a contribution to capital.