NADA urges dealers nationwide to oppose amendment that would create an unworkable process for Natural Gas Vehicle Tax Credit

NADA urges dealers nationwide to oppose amendment that would create an unworkable process for Natural Gas Vehicle Tax Credit

As part of debate on the Senate highway bill currently underway on Capitol Hill, Senators Menendez (D-NJ) and Burr (R-NC) have offered an amendment to incentivize the purchase of natural gas-powered cars and medium- heavy-duty trucks. The amendment would provide consumers with a tax credit of $7,500 to $64,000, depending on the vehicle. This amendment also proposes to increase demand for natural gas vehicles by providing the tax rebate to customers as a point-of-sale discount by allowing the credit to be transferred to the dealer, who would then have to apply to the IRS to be reimbursed. NADA strongly opposes the creation of transferable vehicle tax credits. A vote is expected on the Menendez-Burr amendment this week.

NADA is calling upon all its dealer members across the country to call their senators through the Capitol Switchboard at 202-224-3121 and urge them to oppose the Menendez-Burr natural gas amendment (#1782) to the highway bill because its tax transferability provisions are unworkable in the vehicle market.

NADA says the provision is especially problematic for dealers because:

The amendment could have dealers funding the tax credit at the time of sale, and then waiting for payment from the IRS. The amount of the dealers float on a specific transaction would always be far in excess of any profit on the individual sale. The severity of this cash flow problem would increase with every sale involving a transferable credit.

Dealers would need to have sufficient tax liability to be reimbursed. For example, a dealer may provide cash for several transactions and learn months later that he does not have sufficient tax liability to realize the aggregate value of the credits transferred. The inability to claim a single transferred credit at tax time could destroy the profitability of several previous sales.

For more information, contact the NADA Legislative Office at 202-547-5500 or visit www.nada.org/legislativeaffairs.