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Olds dealers won't get tax relief this year

Time has run out for a tax break that would help Oldsmobile dealers offset the cost of losing their franchise - at least for this year.

The National Automobile Dealers Association was unable to get a bill tailored for Olds dealers added to the economic stimulus package that has been debated in Congress.

House Bill 2374 would have allowed Oldsmobile dealers to defer taxes on money GM provided to help them shut down as long as the funds were reinvested in another franchise within two years of receiving the assistance.

The bill is retroactive to Dec. 12, 2000, when GM announced it would phase out Oldsmobile.

Tom Greene, NADA's COO of legislative affairs, said he was told by legislators that the NADA-backed bill was too narrow to be part of broad legislation designed to pull the economy out of recession.

If the legislation passes next year, dealers who have shut down and settled with GM will have to file amended tax returns to get retroactive tax breaks.

General Motors has turned down 25 percent of the Oldsmobile dealers who have asked for extra financial assistance to phase out the make, according to a recent update sent to dealers by GM. More than 500 dealers have tried to make a case for special treatment.

GM told dealers it will not make special allowances for dealers using training expenses, land and building costs above allowances for new facilities and major renovation, furniture and equipment, future profits, and disposal of used-vehicle inventory. The automaker also will not make special allowances for dealers using LIFO, the last-in-first-out inventory valuation method that offsets inventory price increases caused by inflation or periodic factory price hikes.

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