Senators began voting on the “Tax Cuts and Jobs Act,” which includes a provision that would reduce the current 100 percent deduction of business interest, including floor plan interest, to 30 percent of adjusted taxable income. Sen. Rand Paul (R-Ky.) introduce an amendment to restore the full deductibility of floor plan interest as included in the House bill. NADA strongly supports the Paul amendment.
The Senate tax reform bill is on the Senate floor now. Please call your Senators ASAP and ask them to support Sen. Paul’s amendment. Senators need to hear directly from dealers, even if calls have previously been placed, to urge support for the Paul amendment. Amendments will be voted on later today with final passage of the bill likely on Friday.
Senators should support the Paul amendment because:
- The Senate bill’s limit on business interest unfairly puts small business dealers with high cost inventory at risk of paying higher taxes even when the dealership does not show a profit. Floor plan financing is a specialized loan that funds affordable vehicle inventory, and limiting its deductibility would disproportionately harm small business dealers by substantially raising financing costs.
- The Senate bill treats dealers, generally closely-held small businesses, the same as large corporations that choose debt over equity for tax purposes. Franchised automobile dealers do not have access to equity markets, so floor plan financing is a necessity, not a choice.
- The Paul amendment would incorporate the House tax reform bill (H.R. 1) language, preserving the full deductibility of floor plan financing for a retailer of high-cost inventory such as vehicles, boats, farm equipment, etc., recognizing that limits on floor plan deductibility would disproportionately harm small businesses, particularly during an economic downturn.
Action Needed Now
Senators need to hear directly from YOU about the importance of floor plan financing to your business. Call your Senators and ask them to support Senator Rand Paul’s amendment to ensure floor plan interest remains fully deductible.
To contact to your Senator – Click Here
One-pager on preserving deductibility of floor plan interest – Click here
We want to hear your Senate feedback! Please contact Patrick Calpin, NADA Legislative Affairs, at 202.547.5500 or firstname.lastname@example.org to report if your Senator(s) will support the Paul amendment.
NADA would like to say THANK YOU to all dealers and dealership employees who contacted their Member of Congress in support of NADA’s efforts on tax reform over the past several weeks.
On Saturday, the Senate passed H.R. 1 including an amendment sponsored by Senator Rand Paul (R-Ky) which preserves 100% deductibility of interest on floor plan loans.
Thanks to active dealer engagement across the country, both the House and Senate tax reform bills include nearly identical floor plan interest deductibility provisions. These bills will soon be considered by a House-Senate conference committee to reconcile their differences before both houses of Congress vote on final passage. NADA will keep dealers advised of any developments.
Thank you again from NADA.