Supply Chain Disruptions Relief Act
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.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 700 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 700
To treat certain liquidations of new motor vehicle inventory as
qualified liquidations of LIFO inventory for purposes of the Internal
Revenue Code of 1986.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 1, 2023
Mr. Arrington (for himself and Mr. Kildee) introduced the following
bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To treat certain liquidations of new motor vehicle inventory as
qualified liquidations of LIFO inventory for purposes of the Internal
Revenue Code of 1986.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Supply Chain Disruptions Relief
Act''.
SEC. 2. TREATMENT OF CERTAIN LIQUIDATIONS OF NEW MOTOR VEHICLE
INVENTORY AS QUALIFIED LIQUIDATIONS OF LIFO INVENTORY.
(a) In General.--In the case of any dealer of new motor vehicles
which inventories new motor vehicles under the LIFO method for any
specified taxable year, the requirements of paragraphs (1)(B) and (2)
of section 473(c) of the Internal Revenue Code of 1986 shall be treated
as satisfied with respect to such inventory for such taxable year.
(b) Additional Relief.--
(1) In general.--The Secretary shall, not later than the
date which is 90 days after the date of the enactment of this
Act, prescribe regulations or other guidance under which
dealers of new motor vehicles with a qualified liquidation
(determined after application of subsection (a)) of new motor
vehicles for any specified taxable year may elect--
(A) to not recognize any income in the specified
taxable year which is solely attributable to such
qualified liquidation, and
(B) to treat the replacement period with respect to
such liquidation as being the period beginning with the
first taxable year after such specified taxable year
and ending with the earlier of--
(i) the first taxable year after such
liquidation with respect to which such dealer
does not inventory new motor vehicles under the
LIFO method, or
(ii) the last taxable year ending before
January 1, 2026.
(2) Failure to fully replace liquidated vehicles during
replacement period.--If, as of the close of the replacement
period, the taxpayer has failed to replace all liquidated
vehicles with respect to a qualified liquidation to which
paragraph (1) applies, the taxpayer shall increase gross income
for the last taxable year of the replacement period by the sum
of--
(A) the aggregate amount of income that would have
been required to be recognized in the liquidation year
had the taxpayer elected to apply the provisions of
section 473 of the Internal Revenue Code of 1986 and
not made the election in paragraph (1), plus
(B) interest thereon at the underpayment rate
established under section 6621 of such Code.
(3) Elections.--
(A) In general.--Except to the extent provided in
subparagraph (B), an election under paragraph (1) with
respect to any specified taxable year shall be made by
the due date (including extensions) for filing the
taxpayer's return of tax for such taxable year and in
such manner as the Secretary may prescribe. Once made,
any such election shall be irrevocable.
(B) Certain elections treated as change in method
of accounting.--In the case of an election with respect
to a specified taxable year for which the return of tax
has already been filed before the date of the enactment
of this Act, any election under paragraph (1) for such
specified taxable year may be made on the return of tax
for the first taxable year ending after the date of the
enactment of this Act and shall be treated for purposes
of section 481 of the Internal Revenue Code of 1986 as
a change in method of accounting initiated by the
taxpayer and made with the consent of the Secretary.
(c) Definitions.--For purposes of this section--
(1) Specified taxable year.--The term ``specified taxable
year'' means any liquidation year ending after March 12, 2020,
and before January 1, 2022.
(2) New motor vehicle.--The term ``new motor vehicle''
means a motor vehicle--
(A) which is described in section 163(j)(9)(C)(i)
of the Internal Revenue Code of 1986, and
(B) the original use of which has not commenced.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury or the Secretary's delegate.
(4) Other terms.--Except as otherwise provided in this
section, terms used in this section which are also used in
section 473 of the Internal Revenue Code of 1986 shall have the
same meaning as when used in such section 473.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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