LIFO tax relief for car dealers left out of funding measure

“Car dealers are creating jobs in central Michigan and across the United States, many of whom face inevitable and unforeseen tax bills due to supply chain disruptions during the pandemic that are out of their control. “We are working to strengthen our supply chains and bring vital manufacturing back to America, but car dealerships that use ‘last in, first out’ accounting or LIFO need this relief. I am.”

In the Senate, Senator Sherrod Brown (D-Ohio) introduced a related bill of the same name.

Both bills provide a statutory determination that the requirements for eligible liquidation under Section 473 of the Internal Revenue Code have been met for new car dealers who have experienced reductions in new cars held in LIFO inventory. .

Brown’s bill has the support of more than 50 lawmakers, including 35 Republicans.

“Auto dealers continue to face dramatic and unprecedented inventory shortages as a result of pandemic-related disruptions to foreign supply chains, and without help, local businesses, The recovery can be long and difficult for our employees, and their customers,” Brown said in a statement. “The bill has broad bipartisan support and was not included in our year-end spending package, but I will work with my colleagues in the next Congress to push this to the finish line and provide much-needed relief. I look forward to doing it.”

NADA and the Alliance for Automotive Innovation, along with some Senate Democrats led by Brown and a bipartisan group of US representatives led by Kildee, previously urged the Treasury Department to grant temporary LIFO relief under Section 473. , giving dealers up to three years to bring inventories to more normal levels.

Treasury Secretary Janet Yellen responded to questions from Kildee at a House Ways and Means Committee hearing in June, signaling that her department would support the legislation.

“We understand that Treasury Department staff are working with Congressional staff to develop legislation to bail out affected auto dealers,” Yellen said. We stand by it and look forward to continuing to work with you through that process.”