The Automotive Service Association (ASA) has endorsed the new bipartisan tax framework proposed by U.S. Senate Finance Committee Chairman Ron Wyden, a Democrat from Oregon, and U.S. House Ways and Means Committee Chairman Jason Smith, a Republican from Missouri, as beneficial for independent automotive repair businesses. These businesses are grappling with challenges such as adapting to new automotive technologies, a shortage of skilled technicians and high interest rates.
According to the ASA, the Tax Relief for American Families and Workers Act of 2024 could provide crucial financial relief. The automotive repair industry is facing a significant transformation with the introduction of new technologies like electric vehicles, telematics and autonomous driving systems, necessitating substantial investments in facility and equipment upgrades. Under the proposed tax legislation, interest paid on loans for these upgrades would be deductible. Additionally, the bill suggests a 100 percent bonus depreciation allowance for qualifying property acquired and used between Dec. 31, 2022, and Jan. 1, 2026, and an increase in the maximum amount a business can expense for such property from $1 million to $1.29 million, adjusting for inflation after 2024.
The proposed framework also includes an expansion of the Child Tax Credit, revising the calculation of the maximum refundable credit based on the number of children in a household and increasing the per-child limit to $1,800 for the 2023 tax year, with annual inflation adjustments through 2025.
Scott Benavidez, president of the ASA Board of Directors, emphasized the challenges faced by independent repair shops, saying, “Many independent repairers have had to spend heavily on new equipment and other investments just so their businesses can stay afloat and relevant in this turbulent automotive environment. Personally, I’ve had to invest in a whole host of specialty equipment for my repair shop over the last few years. It’s never been harder for independent repair shops to stay in business. The Tax Relief for American Families and Workers Act of 2024 would make it easier for businesses like mine to continue providing high-quality service to our communities for years to come.”
Bob Redding, ASA’s Washington, D.C. representative, also voiced his support, stating, “I commend Chairman Wyden and Chairman Smith for reaching this important bipartisan legislative tax agreement. Across the United States, Independent automotive repair shops – as well as other small businesses and their employees – stand to benefit from the proposed revisions to the tax code. The framework provides some needed relief to independent automotive repair facilities. ASA hopes that Congress will emulate the leadership demonstrated by Chairmen Wyden and Smith by working expeditiously to send the legislation to the president’s desk.”
