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IN CASE YOU MISSED IT … Manchin, Capito, Bipartisan Colleagues Introduce Legislation to Provide Tax Relief For Auto Dealers

Friday, March 03, 2023 9:00 AM | Anonymous member (Administrator)

U.S. Senators Joe Manchin (D-WV) and Shelley Moore Capito (R-WV) introduced the bipartisan Supply Chain Disruptions Relief Act to provide tax relief to auto dealers experiencing inventory shortages due to global supply chain issues.

“Russia’s war in Ukraine has drastically disrupted supply chains around the world, and it is critical that we protect American auto dealers from the increased financial burdens of inventory shortages. West Virginia has always been an automotive powerhouse, and I’m proud to join this bipartisan effort to provide tax relief to auto dealers across the state and country,” Senator Manchin said. “I encourage my colleagues on both sides of the aisle to support this important legislation, and I will continue advocating for the economic success of American auto dealers.”

“Soaring prices and supply chain disruptions have created significant strain on American families. I’m proud to join with a bipartisan coalition of colleagues to put forth a solution that would bring needed relief, and address West Virginians’ issues regarding vehicle purchases,” Senator Capito said.

The bill would allow new vehicle dealers to delay the recognition of income triggered by the Last-In First-Out (LIFO) recapture for tax years 2020 and 2021, when dealers faced uncontrollable, pandemic-driven inventory shortfalls of new vehicles.

 Specifically, the bill would:

  • Provide a statutory determination that the requirements for a qualified liquidation under Section 473 have been satisfied for new motor vehicle dealers that have had a reduction of new vehicles held in LIFO inventory;
  • Expand the period to replenish inventory and compute LIFO reserve/LIFO recapture until the tax year ending before January 1, 2026; and
  • Direct Treasury to provide regulatory guidance to enable dealers to calculate LIFO during the expanded replacement period.

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