Scott pursues relief for car dealers
U.S. Senators Tim Scott (R-S.C.) and Sherrod Brown (D-Ohio) introduced the Supply Chain Disruptions Relief Act, bipartisan legislation to provide tax relief to auto dealers experiencing inventory shortages due to global supply chain issues.
“Auto dealers across the country have struggled to maintain inventory due to global supply chain constraints,” said Senator Scott. “This legislation will help stabilize the industry and support thousands of jobs in South Carolina by providing much needed tax relief to businesses in our state and around the country.”
“This legislation will grant much needed tax relief to auto dealers facing unique supply chain challenges,” said Senator Brown. “This bill will mean those dealers – that are often small, family-owned businesses – get a temporary break – and a chance to spend their funds on replacing their depleted inventories and investing in their workers.”
Background:
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.