“Car dealerships are job creators across mid-Michigan and throughout America, and many of them are facing unavoidable, unexpected tax bills due to supply chain disruptions during the pandemic that were beyond their control,” Kildee said in a statement. “While we work to strengthen our supply chains and bring critical manufacturing back to America, car dealerships that use ‘Last In, First Out’ accounting, or LIFO, need this relief.”
In the upper chamber, U.S. Sen. Sherrod Brown, D-Ohio, introduced a companion bill under the same title.
Both bills would provide a statutory determination that the requirements for a qualified liquidation under Section 473 of the Internal Revenue Code have been satisfied for new-vehicle dealers that have experienced a reduction of new vehicles 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 foreign supply chain disruptions, and, without support, recovery could be long and hard for Ohio’s affected local businesses, employees and their customers,” Brown said in a statement. “This legislation has broad bipartisan support and although it was not included in the year-end spending package, I look forward to working with my colleagues next Congress to push this across the finish line and provide much needed relief.”
NADA and the Alliance for Automotive Innovation — along with some Senate Democrats led by Brown and a bipartisan group of U.S. representatives led by Kildee — previously urged the Treasury Department to grant temporary LIFO relief under Section 473, giving dealers up to three years to restore their inventories to more normal levels.
Treasury Secretary Janet Yellen signaled her department’s support of legislative action in response to a question from Kildee during a House Ways and Means Committee hearing in June.
“I understand Treasury staff has been working with congressional staff on producing legislation that would provide relief for impacted automobile dealers,” Yellen said. “We support a legislative solution and look forward to continuing to work with you through the process.”
