Last In/First Out (LIFO)

The Supply Chain Disruptions Relief Act, which would provide LIFO tax relief via Section 473 of the IRS Code for car dealerships using the LIFO accounting method, was introduced in both the House and Senate in early 2023.

Businesses using the LIFO inventory method must maintain a minimum level of inventory at year end or risk triggering a recapture tax. Given the current supply chain issues, auto dealers in particular have been unable to acquire inventories necessary to avoid additional tax liability triggered by LIFO recapture. 

AIADA supports LIFO recapture relief through the Supply Chain Disruptions Relief Act.