WASHINGTON — Despite bipartisan efforts in the House and Senate, new-car dealers looking to Congress for legislation on LIFO tax relief may need to wait until next year.
The nearly $1.7 trillion omnibus spending package unveiled Tuesday was seen as one of the last legislative vehicles for a bill that would have provided relief to dealerships that use the "last in, first out" inventory accounting method and have struggled to maintain inventory levels because of the global semiconductor shortage.
Congress is preparing to pass the package before a weekend deadline. The bill, which funds the federal government through Sept. 30, leaves out the much sought-after LIFO relief.
"There is strong, bipartisan, bicameral support in Congress for providing LIFO relief to dealers. However, the omnibus spending bill released Tuesday did not include any business tax provisions such as LIFO," NADA spokesman Jared Allen said in a statement to Automotive News. "NADA will continue working until Congress adjourns this year to leverage the extensive support to find an opportunity to pass LIFO relief."
Lawmakers on both sides of the aisle have supported legislative action to provide relief to dealers who are facing significant tax burdens triggered by global supply chain disruptions and subsequent inventory shortages related to COVID-19.
In April, U.S. Rep. Dan Kildee, D-Mich., introduced a bill — known as the Supply Chain Disruptions Relief Act — that would allow dealerships to wait until 2025 to replace their inventories and determine the income attributable to the sale of such inventory during 2020 or 2021, giving dealers time to restock their inventories as the chip shortage eases and auto production returns to pre-pandemic levels. The bill is supported by more than 170 House lawmakers, including 95 Republicans.
Kildee said he will continue working to provide relief to new-car dealers.