REPRESENTATIVES TORRES, MOORE INTRODUCE BIPARTISAN BILL TO EXPAND FLOOR PLAN FINANCING TAX DEDUCTIONS TO SEMI-TRAILER DEALERSHIPS
Washington D.C. - Representatives Norma Torres (D-CA) and Blake Moore (R-UT) introduced bipartisan legislation to increase access to floor plan financing deductions for semi-trailer dealers.
Current law provides exclusions for dealerships with motor vehicles, recreational trailers, and campers to fully deduct interest paid on floor plan financing, but doesn't extend to semi-trailers. This leaves dealers in a non-parity position with automobile, truck, and recreational trailer dealers despite their shared reliance on floor plan financing.
The Semi-Trailer Tax Parity Act extends the floor plan interest financing deductibility provisions to truck trailers, semi-trailer chassis, and semi-trailer body dealership owners.
"Semi-trailers play a vital part in moving goods through the Inland Empire and to the rest of America," Rep. Norma Torres said. "Yet semi-trailer dealerships are treated differently under the tax code versus other vehicle dealerships, which causes strained finances for business owners and fewer choices for customers. That is why I am co-leading this bill to ensure tax parity for semi-trailer dealers in my district and nationwide.”
“Our federal tax code should be designed to support small businesses and encourage companies to reinvest in their own success. Semi-trailers are a critical component of nearly every sector of the economy and are essential for transporting a wide range of goods, including online orders and life-saving medicines, across the country. I’m proud to introduce the Semi-Trailer Tax Parity Act to allow semi-trailer dealers the same floor plan financing deduction that all other motor vehicle dealerships have access to," Rep. Moore said.
“The National Trailer Dealers Association is grateful for the support of Representatives Moore and Torres in crafting this bipartisan legislation that is critical for floor plan tax parity for semi-trailer dealers,” said Gwendolyn Brown, President of the National Trailer Dealers Association.
“We appreciate Rep. Moore and Rep. Torres sponsoring this bill to bring parity to the deductibility of inventory interest for all motor vehicle dealers. Under the current tax structure, a semi-trailer dealer could lose money and still be required to pay taxes. The Semi-Trailer Tax Parity Act will thankfully resolve this issue for a vital part of the transportation industry,” said Paul Christenson, President of North American Trailer in Utah.
Background:
Under IRC Section 163(j), businesses can generally deduct business interest expenses from their federal taxes by up to 30% of their adjusted taxable income. Because floor plan financing has unique needs, Congress enacted exclusions for motor vehicles, recreational trailers, and campers, allowing dealerships to fully deduct interest paid on floor plan financing.
The Semi-Trailer Tax Parity Act includes truck trailers, semi-trailer chassis, and semi-trailer bodies in the definition of “motor vehicle” under the 163(j) section of the tax code.
Lack of inclusion has resulted in reduced capital for inventory, strained cash flows, reduced inventory levels, and the potential to owe federal taxes for semi-trailer dealerships in years when they have incurred a loss or have no taxable income. This legislation supports and ensures fairness for our locally owned dealerships.
Read the full bill here.