U.S. Senators Shelley Moore Capito (R-W.Va.) and Joe Manchin (D-W.Va.) recently joined with colleagues to introduce the Supply Chain Disruptions Relief Act -- legislation led by U.S. Senators Tim Scott (R-S.C.) and Sherrod Brown (D-Ohio) -- to provide tax relief to auto dealers experiencing inventory shortages due to global supply chain issues.
"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.
"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. As the birthplace of Henry Ford, 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."
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.
In addition to Senators Capito, Manchin, Scott, and Brown, the legislation is co-sponsored by Tammy Baldwin (D-Wis.), John Barrasso (R-Wyo.), Marsha Blackburn (R-Tenn.), Richard Blumenthal (D-Conn.), John Boozman (R-Ark.), Mike Braun (R-Ind.), Ben Cardin (D-Md.), Tom Carper (D-Del.), Bill Cassidy (R-La.), Chris Coons (D-Del.), John Cornyn (R-Texas), Catherine Cortez Masto (D-Nev.), Kevin Cramer (R-N.D.), Mike Crapo (R-Idaho), Steve Daines (R-Mont.), Tammy Duckworth (D-Ill.), Diane Feinstein (D-Calif.), Chuck Grassley (R-Iowa), Bill Hagerty (R-Tenn.), Maggie Hassan (D-N.H.), John Hoeven (R-N.D.), Cindy Hyde-Smith (R-Miss.), Ron Johnson (R-Wis.), Mark Kelly (D-Ariz.), Angus King (I-Maine), Amy Klobuchar (D-Minn.), James Lankford (R-Okla.), Cynthia Lummis (R-Wyo.), Roger Marshall (R-Kan.), Jerry Moran (R-Kan.), Patty Murray (D-Wash.), Alex Padilla (D-Calif.), Gary Peters (D-Mich.), Jim Risch (R-Idaho), Mike Rounds (R-S.D.), Marco Rubio (R-Fla.), Rick Scott (R-Fla.), Jeanne Shaheen (D-N.H.), Tina Smith (D-Minn.), Debbie Stabenow (D-Mich.), Jon Tester (D-Mont.), John Thune (R-S.D.), Thom Tillis (R-N.C.), Chris Van Hollen (D-Md.), Raphael Warnock (D-Ga.), and Roger Wicker (R-Miss.)