Your Aug. 23 editorial "Olds dealers shouldn't get a tax break" misses the main point.
On Nov. 1, 2000, General Motors signed a new, five-year agreement with Olds dealers. On Dec. 12, 2000, GM announced the end of the franchise. There was no way Olds dealers could possibly have planned for that event. That is the core of the fairness argument.
As Automotive News publisher Keith Crain pointed out in his column "Nobody wants to buy an orphan" (Dec. 18, 2000), "Any brand that was selling millions of vehicles a year just a decade ago deserves better."
Businesses typically have the ability to evaluate the tax consequences before a transaction. The current tax code limits the options for Olds dealers.
Olds dealers seek an amendment that will give them the same tax deferral treatment that many other businesses routinely receive through "like-kind exchange" provisions.
Under existing laws, a tax deferral can be received only if replacement property is identified within 45 days and closed within 180. For obvious reasons, that's an unrealistic time frame for auto retailers to identify and purchase replacement dealership property. Dealerships just don't turn over that quickly.
The proposed legislation is not a fix-all for Olds dealers. It helps to level the playing field for dealers facing the transition. It's also good public policy because it promotes investment, jobs and the overall strength of the economy.
That's why the provision has received such strong bipartisan support in Congress.