Scott, Colleagues Introduce Legislation to Provide Tax Relief for Auto Dealers

WASHINGTON – Today, U.S. Senators Tim Scott (R-S.C.) and Sherrod Brown (D-Ohio) introduced the Supply Chain Disruptions Relief Act, bipartisan legislation to provide tax relief to auto dealers experiencing inventory shortages due to global supply chain issues. 

“The ongoing supply chain disruption has created a significant additional tax burden for South Carolina auto dealers that are unable to access crucial inventory,” said Senator Tim Scott. “Our legislation would provide important temporary relief for these businesses who employ thousands of workers across the Palmetto State.”

U.S. Senators Roger Marshall (R-Kan.), Catherine Cortez Masto (D-Nev.), Cynthia Lummis (R-Wyo.), and Patty Murray (D-Wash.) also co-sponsored the legislation.

“NADA commends Sens. Brown and Scott’s bipartisan leadership to help ease the challenges of global vehicle supply chain disruptions that continue to reduce vehicle production,” said Mike Stanton, President and CEO of the National Automobile Dealers Association. “The bill would provide needed short-term relief to help the auto industry recover from severe inventory shortfalls due to the pandemic and supply chain and semiconductor shortages. NADA strongly supports this legislation to reaffirm existing federal law related to a ‘major foreign trade interruption’ and urges Congress to pass it as soon as possible.”


Auto dealerships often use the Last-In First-Out (LIFO) inventory method, which can result in a large tax bill for dealerships that don’t maintain a minimum level of inventory at the close of the year. The Supply Chain Disruptions Relief Act would provide a statutory determination that the requirements for a qualified liquidation under Section 473 have been satisfied for new motor vehicle dealers that have had a reduction of new vehicles held in LIFO inventory.

Click here to read the bill.