Bill Overview
Title: Supply Chain Disruptions Relief Act
Description: This bill modifies the treatment of liquidations of new motor vehicle inventory as qualified LIFO (last in first out accounting method) inventory. It allows new motor vehicle dealers to elect to wait until the end of 2025 to replace their inventory for purposes of determining income attributable to the sale of such inventory during 2020 and 2021.
Sponsors: Rep. Kildee, Daniel T. [D-MI-5]
Target Audience
Population: New motor vehicle dealership employees and stakeholders
Estimated Size: 2000000
- The bill specifically targets new motor vehicle dealers by altering how they handle their inventory for tax purposes.
- By allowing dealerships to delay the need to replace inventory for tax calculations, the bill provides financial relief to these businesses, which may have been impacted by supply chain disruptions in 2020 and 2021.
- Dealerships often support local economies by employing a significant number of workers, so changes affecting dealer financial health can indirectly impact the labor market.
- Motor vehicle dealerships might benefit from improved cash flow or reduced taxable income, allowing them to sustain operations during economically challenging times.
- Consumers may indirectly benefit if dealerships facing less financial pressure are able to maintain stable prices or keep more outlets open, preserving local access to vehicle sales and service.
- The broader auto industry ecosystem, including parts suppliers and service industries, might also benefit if dealerships are better able to manage financial difficulties and continue operations uninterrupted.
Reasoning
- New motor vehicle dealerships are central to the policy as they directly benefit from adjustments in inventory accounting deadlines, providing financial relief.
- With 16,000 franchised dealerships and a significant workforce, most affected individuals will be dealership owners or workers whose income stability is tied to the dealership's financial health.
- Trickle-down effects can lead to indirect benefits for parts suppliers or service staff due to potential improved dealership stability.
- Many people will not be directly impacted if they are not involved in vehicle sales or supporting industries, hence including such variety in interviews.
Simulated Interviews
Car Dealership Manager (Detroit, MI)
Age: 48 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 15/20
Statement of Opinion:
- This policy is crucial for sustaining our operations, giving us breathing room amidst supply chain challenges.
- Our ability to remain competitive relies on stable inventory, and this change helps avoid layoffs or budget cuts.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 5 |
| Year 2 | 8 | 5 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 5 |
| Year 20 | 7 | 4 |
Car Salesperson (Phoenix, AZ)
Age: 38 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 18/20
Statement of Opinion:
- Anything that helps our dealership avoid closing or slashing commissions is a benefit for us.
- It’s hard enough with the digital sales shift, so financial relief is welcome.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 4 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Auto Parts Supplier (Atlanta, GA)
Age: 62 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- Financially stable dealerships mean better business for us as suppliers.
- The relief might keep them ticking over, which is indirectly great for us.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Vehicle Technician (Houston, TX)
Age: 27 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 16/20
Statement of Opinion:
- The policy could have some benefit if it helps keep the shop busy.
- There’s always uncertainty about how much trickles down to us on the workforce floor.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 4 |
Independent Financial Advisor (Los Angeles, CA)
Age: 52 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 14/20
Statement of Opinion:
- No direct impact on me, but my clients in this sector could benefit.
- A stabilized dealership market might reflect positively on associated industries.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Software Developer (Columbus, OH)
Age: 29 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 20/20
Statement of Opinion:
- This policy is interesting but doesn’t affect me directly.
- I can see how it might help the automotive sector in general.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Human Resources Manager, Auto Manufacturer (Chicago, IL)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 13/20
Statement of Opinion:
- Dealership stability can influence our employment in manufacturing indirectly.
- Any relief helps stabilize workforce requirements and planning on our end.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Small Business Owner, Auto Repair Shop (Dallas, TX)
Age: 40 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- Healthy dealerships maintain a flow of business for my shop.
- Indirectly, the policy seems beneficial if it keeps dealers financially buoyant.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Supply Chain Analyst (New York, NY)
Age: 33 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 17/20
Statement of Opinion:
- This helps us understand and plan for the automotive sector's stability.
- It doesn't change my wellbeing, but influences professional assessments.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Public Relations Consultant for Automotive (Salt Lake City, UT)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 13/20
Statement of Opinion:
- This policy will be positively framed to highlight responsiveness to dealership issues.
- It appears constructive for our clients in the automotive sector.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Cost Estimates
Year 1: $75000000 (Low: $50000000, High: $100000000)
Year 2: $75000000 (Low: $50000000, High: $100000000)
Year 3: $0 (Low: $0, High: $0)
Year 5: $0 (Low: $0, High: $0)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The shifted tax revenue may affect federal budgets in the short term, requiring adjustments to other spending or revenue measures.
- The policy is intended as a temporary relief measure, and any long-term fiscal impacts depend on economic recovery and dealership sales post-2025.
- Compliance and monitoring costs will be minor compared to the impact on tax revenue, but they still pose considerations for tax administration.