Treasury Modifies Vehicle Classifications for EV Credit; LIFO Relief Bill Reintroduced
The U.S. Treasury Department announced today that it would modify how vehicles are classified under the MSRP caps in the Clean Vehicle Tax Credit (CVTC). Following industry pushback on some crossover SUVs being treated as sedans under the new law, Treasury now says that it will use the EPA Fuel Economy Labeling standard to determine how a vehicle should be classified. Under the law, SUVs, trucks, and vans must have an MSRP of not more than $80,000, while sedans have a cap of $55,000. Importantly, consumers who have purchased and taken delivery of vehicles since January 1, 2023 can now claim the credit even if it didn’t qualify under the previous classificications.
LIFO
This week a bill to provide tax relief to dealers who use the Last-In, First-Out (LIFO) accounting method was reintroduced in Congress. The Supply Chain Disruptions Relief Act would provide LIFO tax relief via Section 473 of the IRS Code by giving dealers who were unable to replace their new auto inventory during tax year 2020 and 2021 due to severe supply shortage a three year grace period. The legislation was introduced by Reps. Dan Kildee (D-MI) and Jodey Arrington (R-TX). Similar legislation was passed by the Senate late last year, but the House adjourned before its version of the bill could pass.
118th Congress
Key committees continued to take shape over the last week, with House Ways & Means Ranking Member Richard Neal (D-MA) and Senate Finance Committee Ranking Member Mike Crapo (R-ID) announcing committee memberships. With the change in control of the U.S. House of Representatives, Democrats will have seven fewer seats on the Ways & Means Committee, and will include Reps. Lloyd Doggett (TX), Mike Thompson (CA), John Larson (CT), Earl Blumenauer (OR), Bill Pascrell, Jr. (NJ), Danny K. Davis (IL), Linda T. Sánchez (CA), Brian Higgins (NY), Terri A. Sewell (AL), Suzan DelBene (WA), Judy Chu (CA), Gwen Moore (WI), Dan Kildee (MI), Don Beyer (VA), Dwight Evans (PA), Brad Schneider (IL), and Jimmy Panetta (CA). Senate Fiannce Committee Ranking Member Mike Crapo (R-ID) also welcomed three new Republicans to the committee this week: Sens. Ron Johnson (WI), Thom Tillis (NC), and Marsha Blackburn (TN).
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ICYMI
New Jersey dealer Mike DeSilva of Liberty Auto Group accepted the gavel at the AIADA Chairman’s Reception in Dallas last Friday evening and will serve as AIADA’s Chairman for the next year. Check out the press release and read more about Mike here.
Quote of the Week
“Our legislators need to acknowledge and celebrate the investment the international nameplate auto industry has made in America. We’ve been here for multiple generations, creating jobs, paying taxes, and building and selling the vehicles Americans want to drive. We’re not going anywhere.”
-Mike DeSilva, AIADA Chairman (www.aiada.org)
Friday Feel Good
Here is just one recent example of how dealers are doing good in their communities:
Gary Rome Hyundai announced it had raised over $175,000 for Ronald McDonald House Charities of Connecticut and Massachusetts Springfield House through its Trees of Hope event.
We want to hear more about how you are supporting your local community – tweet us at @AIADA_News and use the hashtag #DealersDoGood.
