Finance & Taxes | American International Automobile Dealers

Paying local, state, and federal taxes is part of being a responsible small business owner and citizen. Unfortunately, due to unprecedented government oversight and a complex tax code, that responsibility takes up too-large a share of a dealers’ time and resources. That is why AIADA is working with legislators and regulators in Washington, D.C., to establish equitable, rational tax laws that benefit all Americans and allow small businesses to grow to their full potential.

AIADA grapples with the Estate Tax, more appropriately called the Death Tax; LIFO; and other serious tax issues every year in Washington. We are dedicated to ensuring that dealers are given an opportunity to expand their businesses, strengthen their communities, and, one day, pass their legacy on to the next generation. Small businesses keep the American economy running. Taxing them into bankruptcy hurts us all.

Our Work on Finance and Taxes

Border Adjustment Tax (BAT)

Death Tax

Last-In/First-Out Accounting Method (LIFO)

Fast Facts on the Death Tax

In December 2012 an important Estate Tax relief agreement was negotiated and became part of H.R. 8, the American Taxpayer Relief Act of 2012.

That legislation permanently set estate tax parameters at a $5 million exemption level, permanently indexed to inflation; a 40 percent top rate; and spousal transfer or portability.

Currently, the 2015 Estate Tax has a $5.43 million exemption.

The Death Tax is the leading cause of termination for most small businesses. 70 percent never make it past the first generation.

While the individual income tax brings in $829 billion annually, the Death Tax brings in only $24 billion, or 1.1 percent of total federal revenue.

The majority of automobile dealerships are family-owned businesses, some of which have been in the family for generations. For those inheriting a dealership, there are few assets of significant value that can be sold without adversely impacting the dealership as a whole - and paying the Death Tax by selling off dealership assets can mean the death of the dealership.

Small businesses spend on average $9,000 on estate planning and $28,000 a year on life insurance premiums to prepare for the tax. Some AIADA members spend over $100,000 a year on estate tax planning.

According to the Heritage Foundation, unnecessary spending on the Death Tax undermines job creation and wage growth and is responsible for the loss of between 170,000 and 250,000 potential jobs each year.

Dealers on Taxes

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