Senator Sherrod Brown, D-OH, is introducing OSCPA-supported bipartisan legislation to provide tax relief to auto dealers experiencing inventory shortages because of global supply chain issues.
Auto dealerships often use the Last-In First-Out (LIFO) inventory method, which can result in a large tax bill for dealerships that don’t maintain a minimum level of inventory at the close of the year. The Supply Chain Disruptions Relief Act 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.
“Anyone who has tried to purchase a car during the pandemic has experienced frustration with the significant inventory shortages faced by auto dealers in Ohio and across the nation,” said Scott Wiley, CAE, President & CEO of the Ohio Society of CPAs. “For auto dealers who use the ‘Last-In, First-Out’ (LIFO) accounting method for automobile inventories, the challenge to replace inventory could result in unexpected and problematic tax liabilities. OSCPA appreciates Senator Brown’s leadership in driving tax relief efforts for this important industry sector as they struggle through ongoing supply chain disruptions.”
Brown is joined by U.S. Senators Tim Scott (R-SC), Catherine Cortez Masto (D-NV), Roger Marshall (R-KS), Patty Murray (D-WA), and Cynthia Lummis (R-WY) joined Brown in introducing the legislation.