Dealers in Washington to oppose Border Adjustment Tax

Dealers in Washington to oppose Border Adjustment Tax

American International Auto Dealerês Fly-In brought dealers from across the U.S. to Washington last week to tell members of Congress why they should oppose the Border Adjustment Tax (BAT) legislation before the House Ways and Means Committee. The effort, supported by NADA and U.S. state and metro dealer associations, raised a large industry crowd, as AIADA cited a study by the Center for Automotive Research saying that a 20 percent BAT would add $2,000 on average to the price of all new vehicles.

The tax, which the Trump administration says would raise $7 trillion over 10 years, would cost the average U.S. consumer $1,700 a year, AIADA President Cody Lusk told dealers at the conference. AIADA suggested that dealers should encourage their employees to write to their members of Congress, too, as higher auto prices could dampen the new-car market and potentially result in dealership layoffs.

House Speaker Paul Ryan, who is pushing the BAT proposal, equates it to VAT (value-added tax) used widely in Europe. But they are not the same because the VAT is paid by consumers at the point of sale, as opposed to a BAT which taxes products before sale.

Dealer attendees to the AIADA Fly-In saw a video taken at the Washington Auto Show where consumers were interviewed for their opinion on the BAT. Each consumer interviewed at the Auto Show expressed concern that a BAT would create a form of double taxation.

Before dealers headed to Capitol Hill for their Congressional meetings, they were briefed on the tax and on the perennial question, What is a domestic car? by Rep. Mike Kelly (R-PA), a dealer himself and industry supporter. The BAT legislation is currently in the House Ways and Means Committee, of which Kelly is a member. Kelly said that a BAT is unlikely to pass the Senate.

Paul Ritchie of Hagerstown Honda, chairman of AIADA, officiated at the conference where dealer association leaders were in attendance with their members. In addition to AIADA and NADA, NAMAD and the Motor Equipment Manufacturers Association (MEMA) have come out against the tax, saying it could set back manufacturing jobs. WANADA for its part attended the conference, visiting and/or sending letters to members of Congress from the Washington area registering opposition to the BAT legislation.