The National Automobile Dealers Association wanted to alert principals and store owners who might be impacted by any turkey-consumption slumber about a crucial part of the U.S. Senate’s tax reform measure that currently includes a significant change regarding deductibility of floor plan interest.
As currently written, NADA explained the Senate’s tax bill would limit the deductibility of business interest — including floor plan interest — to 30 percent of adjusted taxable income. As interest rates increase, the association stressed that this change would result in dealers paying higher taxes even when a dealership does not show a profit.
“This is a tax increase for your business and could be especially devastating to cash flow, particularly to many of our smaller members, during an economic downturn,” NADA said.
“It’s imperative that we as a community of auto dealers and dealership employees take collective action to educate lawmakers regarding a major threat to dealerships that is included in the current version of the Senate tax bill,” NADA continued.
While NADA acknowledged the Senate tax reform bill is still being drafted, the legislation could be voted on as early as the last week of November.
“Senate floor action is critical to preserving the full deductibility of floor plan loans since there may not be opportunities to change the bill after the Senate vote,” NADA said.
“NADA urges dealers to contact their Republican Senator to ask them to add the House bill language that preserves full floor plan deductibility,” the association went on to say.
For more information or to provide Senate feedback, contact Patrick Calpin with NADA Legislative Affairs at (202) 547-5500.